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Compliance Risks in Banking in the Philippines: Key Issues and Solutions
The Philippine banking industry is facing numerous challenges that pose significant compliance risks. The sector’s major assets and activities are experiencing continued weaknesses due to aging populations, maturing markets, and stagnant growth.
Key Issues
- Economic and market conditions: According to PwC Risk Assurance - Financial Services, economic and market conditions are a key issue in the Philippines.
- Digital disruption: With IT systems playing a fundamental part of organizations, clients, customers, and regulators need to trust them.
- Organizing big data: Executives who once relied on their intuition and experience are now faced with machines that can learn from massive amounts of data.
Risk Management
Risk management is a fundamental part of a financial institution’s business. Financial institutions cannot avoid risk entirely, and the most successful institutions are those that identify the appropriate levels of risk to assume and put the appropriate measures in place to manage that risk.
Regulatory Burden
The regulatory burden has increased significantly since the global financial crisis, making it essential for banks to embrace compliance opportunities to stay competitive. PwC Risk Assurance - Financial Services offers compliance management solutions through execution of compliance audit and gap analysis to identify major gaps in organizations and provide recommendations.
Increased Competition
Increased competition is another challenge in the banking sector. Consumers expect more personalized service, and institutions that provide such services will dominate their share in the marketplace. PwC Risk Assurance - Financial Services adds value to clients by providing practical advice and benchmarking against local publicly listed companies and peers within the region.
Solutions
To address these compliance risks, PwC Risk Assurance - Financial Services offers various solutions, including:
- Internal audit outsourcing and co-sourcing
- Independent compliance testing (ICT)
- AML/FATCA compliance review
- Business controls advisory
- Development of manual of operations
- Internal audit staff secondments
- ICAAP independent validation
- BSP Circular Compliance Assessment
Conclusion
By leveraging these solutions, banks in the Philippines can mitigate compliance risks and ensure they remain competitive in today’s business climate.