Compliance Risks in Finance: A Growing Concern in Namibia
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As the financial sector continues to evolve, compliance risks are increasingly becoming a major concern for institutions operating in Namibia. The Bank of Namibia’s Risk Management and Assurance Division has identified key areas where compliance risks can arise, highlighting the need for strict adherence to regulations and guidelines.
Internal Audit Function
The internal audit function within the Bank is responsible for evaluating the effectiveness of risk management, control, and governance processes, ensuring that they are robust enough to withstand potential threats. The Chief Internal Auditor reports directly to the executive leadership and the Audit Committee, providing an independent and objective assessment of compliance risks.
Risk Management
Risk Management is another critical area where compliance risks can arise. The Bank’s Risk Management function is responsible for:
- Identifying key risks to the institution
- Examining the adequacy of internal controls
- Evaluating the effectiveness of risk management systems
- Ensuring that business continuity plans are in place to minimize disruptions in the event of unforeseen operational events
Compliance Management
Compliance management is also a crucial aspect of financial institutions’ operations. Each department within the Bank is responsible for:
- Implementing and maintaining compliance processes to ensure adherence to relevant legislation, standards, policies, procedures, contractual obligations, and agreements
- Enhancing their compliance capabilities through training and reporting support provided by the Division’s Compliance Management component
Stakeholders
The Financial Intelligence Centre (FIC), Namibia Deposit Guarantee Authority (NDGA), and Sovereign Wealth Fund also receive similar services from the Risk Management and Assurance Division, highlighting the importance of compliance in the financial sector.
Objective
The primary objective of the Division is to assist the Bank’s management and Board of Directors in executing their responsibilities effectively. The Division’s Head, Ms. M. Tjongarero, can be contacted for general enquiries regarding risk management and assurance matters.
By emphasizing compliance risks, the Bank of Namibia’s Risk Management and Assurance Division plays a vital role in ensuring the stability and integrity of the financial sector in Namibia.