Financial Crime World

PNB Complies with Regulatory Requirements, Enhances Compliance Framework

Philippine National Bank (PNB) has ensured that all employees pass a rated written examination on compulsory training courses to strengthen compliance within the institution.

Strengthening Compliance Awareness Training

As part of its commitment to regulatory requirements, PNB’s Global Compliance Group, in coordination with the Human Resources Group, conducts basic compliance awareness training for new hires and refresher courses for existing employees every 18-24 months. The bank has also implemented a tailored training program for specific sectors, including:

  • Branch Clusters
  • New Tellers
  • Sales and Service Heads

Independent Testing and Reviews

To ensure compliance risk mitigation activities are in place and functioning as intended, PNB conducts independent testing and reviews throughout the organization. In 2015, 130 compliance testing reports were issued on selected areas using a risk-based approach, while in 2016 and YTD 2017, 183 and 115 compliance testings and reviews were conducted, respectively.

Compliance Testing and Review Undertaken by Business Units

PNB’s business units are also actively involved in compliance testing and review. The bank has implemented a system where:

  • Competent and independent reviewers comprised of auditors, branch Area Operations Officers, compliance officers/compliance designates, and risk overseers conduct reviews
  • Required changes to corrective actions are escalated to responsible seniors for immediate implementation

Working with Regulatory Bodies and Enforcement Agencies

PNB has been actively working with regulatory bodies and enforcement agencies to:

  • Initiate new policies and procedures aligned with international best practices
  • Ensure timely submission of regulatory reports
  • Participate in technical working groups among regulatory bodies and banking organizations
  • Cooperate fully with ongoing investigations

Effective Compliance Framework Boosts Profits and Reputation

An effective compliance framework has been proven to benefit the bank by:

  • Focusing resources on revenue-generating activities
  • Enhancing market perception among customers, interbank counterparties, and regulators
  • Strong support from its Board of Directors and Senior Management, guided by regulators, enabling significant enhancements in its compliance framework.

Key Enhancements in 2016-2017

In 2016-2017, PNB achieved several key enhancements, including:

  • Creation of management committees for complex business and support groups
  • Appointment of an AML Cybercrime Officer
  • Reorganization of the Compliance Group to six divisions
  • Increased plantilla positions
  • Modified compliance programs for high-risk products and services
  • Comprehensive enterprise-wide certifications
  • Monthly compliance packages for Board and Senior Management

Ethical Standards Committee

PNB has an Ethical Standards Committee (ESC) that ensures a high level of ethical standards among employees and manages reputational risk by implementing the bank’s Code of Conduct. The ESC, chaired by the Head of the Legal Group and Vice-Chaired by the Head of the Human Resource Group, meets weekly to conduct investigations and render decisions if warranted.

Conclusion

Overall, PNB’s compliance framework has been enhanced through its strong support from regulators, active engagement with business units, and commitment to ethical standards.