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Compliance Procedures in Banking: A Key to Earning Public Trust

In Japan’s highly regulated banking sector, compliance with applicable laws and societal norms is essential for earning the trust of society. Seven Bank recognizes the importance of its public mission and the significance of its social responsibilities, and has developed a range of initiatives to ensure compliance.

Compliance Systems in Place

The bank has implemented a robust compliance system that enables each employee involved in real operations to have strong awareness and knowledge of compliance issues. This ensures thorough compliance across the organization.

Compliance Committee

Seven Bank has established a Compliance Committee, an advisory body to the Executive Committee, which:

  • Confirms and verifies the status of compliance related to operations
  • Considers measures concerning compliance
  • Responds to compliance-related problems and issues
  • Reports important compliance-related matters that require management attention

Major Agendas for Compliance Committee in FY2022

The committee focused on several key areas, including:

  • Results and plans of compliance program
  • Operation of the compliance consultation system
  • Revision of Compliance Manual
  • Response for customer protection
  • Responses to financial crimes and antisocial groups
  • Management of outsourcing contractors

Compliance Program

The bank establishes a compliance program each fiscal year, setting out its compliance implementation plan for that year. The Board of Directors reviews and evaluates the progress and implementation status of the compliance program and uses these reviews to formulate a compliance program for the following fiscal year.

Key Compliance Initiatives

Seven Bank has implemented several key initiatives to ensure compliance, including:

  • Information Management: Improving the effectiveness of information management structures
  • Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT): Sophisticating AML/CFT management structures based on relevant laws and regulations
  • Foreign Account Tax Compliance Act (FATCA): Accurate annual FATCA reporting
  • Management of outsourcing contractors: Improving the effectiveness of outsourcing contractor management structures
  • Harassment prevention measures: Proper implementation of harassment prevention measures

Main Compliance Issues

Prevention of Money Laundering and Financial Crimes, and Measures against Antisocial Groups are key compliance issues for Seven Bank. The bank has established a policy for countermeasures against money laundering and the provision of terrorist funds, and has implemented strict confirmation procedures at transactions to eliminate relationships with antisocial groups and prevent fraudulent accounts from being opened.

Compliance Consultation System

The bank has established a Compliance Consultation System to identify and address compliance issues early and prevent reoccurrences. The system provides contact points for both internal and external consultation and reporting, including:

  • Compliance Officer in each division
  • Compliance Consultation Desk within the Bank
  • Groupwide Help Line outside the Bank

Conclusion

Seven Bank’s commitment to compliance is essential to earning public trust and ensuring the integrity of its operations. By implementing robust compliance systems, procedures, and initiatives, the bank demonstrates its dedication to upholding high ethical standards and maintaining a strong reputation in the Japanese banking sector.