For banks to legally carry out business in a particular jurisdiction, they must have robust compliance and governance structures that satisfy the regulatory requirements of the given jurisdiction. Often, regulations are complex, and with cross-border investments and trade, banks frequently encounter multiple jurisdictions with varying regulatory standards.

However, compliance and governance have broader, more significant roles. They facilitate cross-border investments and trade and set guidelines for unlocking the transformative impacts of digital technology while securing the bank from various risks associated with markets, financial crimes and fraud.

Inam Cassim, Head of Conduct, Financial Crime and Compliance of Standard Chartered Sri Lanka, shares insights into his role, as both gatekeeper and enabler, contributing to the bank’s objectives to build a better future for its customers and communities with sustainable and responsible banking.

As the Head of Conduct, Financial Crime and Compliance of Standard Chartered Sri Lanka, how would you define your purpose? How does it sync with the bank’s vision for Sri Lanka?

Standard Chartered is committed to its brand promise ‘Here for good’ which reflects who we are and how we act. Our purpose is to drive commerce and prosperity through our unique diversity. We offer services that enable people and companies to succeed, creating wealth and growth across our markets. Our valued behaviours – ‘Do the right thing, Never settle and Better together’ – reflect how we achieve our business objectives. Our people bring our brand to life through the valued behaviours they demonstrate every day.

My purpose as Head of Conduct, Financial Crime and Compliance is to be an enabler of the above aspects by partnering with key stakeholders, within and outside the company, to drive the right outcomes for clients and communities. We are the trusted advisors and independent guardians of the businesses and functions that drive these outcomes. Everything my colleagues and I deliver is linked to the larger strategy of the bank. Standard Chartered is a bank like no other. We have a huge opportunity to build a better future with our customers and communities.

Can you explain the significance of these pillars – conduct, financial crime and compliance – and what it takes to build solid structures around them?

Let me start with compliance. Put simply, it is complying with all laws, regulations, guidelines, codes etc. which are applicable to the business we facilitate. It’s not only the letter of the law but the spirit of the law in which they are intended. It gets much more complex when you are a foreign bank as you are then subject to regulations originating from outside your operating jurisdiction. We are a licensed entity, and we must protect it.

Access to financial systems helps transform lives, helping to reduce poverty and spur economic development. Unfortunately, the financial system is also used by people who are involved in some of the damaging social crimes – drug/human trafficking, terrorism, bribery and corruption, fraud, and tax evasion. Here is where banks become vulnerable which puts us on the frontline of fighting financial crime. As a gatekeeper to the financial system, it is our responsibility to implement and maintain robust defences that are imperative to being in business. Whilst there are regulatory obligations in this space, the bank is also cognisant of its social obligations. Our ambition is to tackle some of these damaging crimes by making the financial system a hostile environment for criminals and terrorists.

Non-compliance in both these pillars has significant consequences leading to financial penalties, regulatory sanctions and reputational risk that may curtail future business opportunities. If one were to search the web, one would see the significant fines and sanctions imposed on financial institutions. That’s where our conduct pillar steps in to ensure that institutional and individual conduct is at the helm and is robust. From our business model to all the enablers, such as infrastructure, resources and technology, effective leadership and governance, conduct covers a broad spectrum, ensuring fair outcomes for our clients and building and sustaining regulatory confidence.

How do you align the governance structure and culture of the bank to these critical areas?

The governance structure is defined in our enterprise risk management framework. It applies to all our principal risk types, including the three we are discussing which I am accountable for. Thus, we have a governance framework for conduct, financial crime and compliance.

The culture of the bank revolves around the Code of Conduct and Values. The Code of Conduct outlines how we can make sure that the decisions we make are the right ones. It encompasses all aspects of the risks that I provide oversight to. Our people are assessed on these valued behaviours as part of their performance evaluations.

Hence, these critical areas are embedded in the governance and culture and complement our objectives.

Finally, we hear the phrase ‘Tone from the top’ very frequently. However, in my belief, its application across organisations varies significantly. At Standard Chartered, it is real and visible, and the leadership is held accountable. This sets the tone for downstream actions.

How is this focused approach to conduct, financial crime and compliance benefitting the bank and its customers?

Our key stakeholders – shareholders and depositors – expect their monies to be utilised and managed prudently; a good return for their investment and more importantly the security of their capital.

Our clients look for solutions and fair outcomes to further their business objectives whilst suppliers look forward to continued business with the bank. On the other hand, the regulator looks for a sustainable business model, active participation in economic activities, and compliance with regulations and their prudential standards. Thus, running a good business in all aspects is imperative. The framework we have on conduct, financial crime and compliance ensures that we are here for good and that both our customers and the bank derive the optimum outcomes.

Keeping ourselves clear of regulatory actions also helps attract clients as they look for a bank that provides them security and the right outcomes and does the right thing.

If you consider the factors shaping the future of banking in Sri Lanka, how is the Conduct, Financial Crime and Compliance Team helping to unlock new opportunities for the bank?

Banking is evolving fast and is continuously exploring new opportunities in unfamiliar territories. While the pursuit of financial rewards is justified, the element of risk that a business may inherit is not necessarily visible in the first instance. We work very closely with product teams, businesses and even operations to demystify the risk attached to a particular activity/proposition and facilitate appropriate risk mitigants to ensure it is within the risk appetite. We strongly believe that compliance is a competitive advantage and facilitates a sustainable business model. It also acts as a safety net with the right controls across all business lifecycles.

Since banking is a highly regulated industry, we also work closely with the regulators to better understand new developments that help us spot business opportunities. The discipline within the pillars helps us navigate and manage these principal risk types and facilitate new opportunities.