OIB HEAD OF COMPLIANCE CALLS FOR STRONG COMPLIANCE FUNCTION IN ‎BANKS

Federation of Egyptian Banks (FEB) has recently invited Mr. Hany Abou-El-Fotouh, Assistant General Manager ‎and Head of Compliance, Oman ‎International Bank (OIB) to make a presentation to the Compliance Officers' ‎Committee about effective compliance functions in banks. ‎

Abou-El-Fotouh defined compliance as "a system which is designed to ensure that the bank does, as far as is ‎reasonably practical, what is necessary to “get it right” in terms of its legal obligations." He explained that ‎‎"effective compliance is crucial for banks and it is critical to the

success on any bank and supports strong ‎relations with regulators. A failure to comply may involve serious results, including large fines and even ‎imprisonment. In addition, banks should keep trust of stakeholders"‎

Basel Committee on Banking Supervision has a unique definition of compliance function: "An independent ‎function that identifies, assesses, advises on, monitors and reports on the bank’s compliance risk, that is, the ‎risk of legal or regulatory sanctions, financial loss, or loss to reputation a bank may suffer as a result of its ‎failure to comply with all applicable laws, regulations, codes of conduct and standards of good practice ‎‎(together “laws, rules and standards”)”. Speaking on this definition, Abou-El-Fotouh said "it is the backbone of ‎the job description of all compliance officers and all compliance-related activities should be tied to it"‎


He further explained that compliance risk is the risk arising from a failure to comply with relevant laws and ‎regulations governing the conduct of the bank’s business. Therefore, compliance officers must carry out ‎compliance risk assessment i.e. examine the risks associated with failing to meet legal obligations. ‎Subsequently, tailor compliance measures to the risk identified by the risk assessment.‎