Toward a mapping of compliance risk in banks

Abstract

Purpose

Compliance risk management in the banking sector is crucial because of its multifaceted nature and its potential repercussions on reputation and financial stability. This study aims to present a systematic approach to mapping compliance risks, leveraging the risk self-control assessment (RSCA) method. Integrating quantitative and qualitative assessment techniques and drawing on human expertise and industry best practices.

Design/methodology/approach

The authors followed a methodology that involves conducting semistructured interviews with banking compliance professionals and analyzing professional frameworks to gather pertinent information. This comprehensive approach allows to obtain a holistic view of the risks involved and to refine the risk analysis process.

Findings

A step-by-step guide to map compliance risk within banks is proposed. The authors offer a rigorous process to enhance compliance risk management practices within the banking sector, providing actionable insights to effectively navigate regulatory complexities and safeguard financial stability.

Practical implications

The insights from this paper will guide compliance officers and risk managers to better assess and monitor compliance risk within their organizations.

Originality/value

To the best of the authors’ knowledge, this may be the first thorough paper that tackles the topic of mapping compliance risk in banks, from identifying areas of risk to corrective measures after drawing up the risk map, using the RSCA approach.

Citation

Tahiri, A. and El Arif, F.Z. (2024), "Toward a mapping of compliance risk in banks", Journal of Financial Regulation and Compliance, Vol. 32 No. 5, pp. 633-645. https://doi.org/10.1108/JFRC-03-2024-0048