Financial Regulation and Governance in Cyprus: A Burden or a Necessity?

The banking sector in Cyprus has been subject to increasing regulatory requirements and compliance standards, sparking concerns about their impact on the industry and its clients. In this article, we’ll explore the perspectives of bank compliance officers on this issue.

A Need for Stricter Regulation

According to Marios M. Skandalis, Chief Compliance Officer at Bank of Cyprus, the need for stricter regulation and governance has become evident in recent years. “Unless we publicly accept that our economic model failed and follow a difficult path of honest and real remediation with painful reforms, our country will remain the target of accusations,” he emphasized.

Challenges Since the 2013 Crisis

Maria Aristidou Demetriou, Chief Compliance Officer at Hellenic Bank, noted that the industry has undergone significant changes since the 2013 crisis. “The challenging sanctions environment and expectations from stakeholders have increased the need for further transactional scrutiny,” she said.

A European Standard

George Markides, Head of Compliance at cdbbank, pointed out that regulation and compliance requirements are not unique to Cyprus, but rather a European standard. “These regulations and requirements are the result of market failures and scrutiny on AML issues,” he explained.

Balancing Regulation with Economic Activity

Marianna Akkidou Mamantopoulou, Head of Compliance/Anti-Money Laundering Compliance Officer at Ancoria Bank, highlighted the need for a balance between regulation and promoting a beneficial environment for economic activity. “A risk-based approach is essential to ensure that compliance measures do not hinder economic growth,” she noted.

The Importance of Adherence

Maria Demetriou, Manager of Compliance and Corporate Governance Division and MLRO at National Bank of Greece (Cyprus), emphasized the importance of adherence to regulatory requirements in establishing trust and confidence among clients. “Clear and comprehensive information empowers clients to navigate the financial landscape with confidence,” she said.

Protecting the System

George Markides also stressed that while regulations may pose challenges in the short term, they are essential for protecting the system, banks, and customers from risks they do not realize they are exposed to.

The Way Forward

While regulatory requirements have increased significantly in recent years, posing challenges for both banking institutions and customers, compliance officers agree that these measures are necessary to ensure financial stability, protect customers, and prevent illegal activities such as money laundering and terrorist financing.

Conclusion

In conclusion, while the increasing regulatory burden on Cyprus’ banking sector may be perceived as a challenge, compliance officers believe that it is a necessary step towards ensuring the integrity of the financial system. By striking a balance between regulation and promoting economic activity, we can build trust and confidence among clients and protect the system from risks.

Key Takeaways

• Regulatory requirements have increased significantly in recent years
• Compliance measures are essential for protecting the system, banks, and customers from risks
• A risk-based approach is necessary to ensure compliance measures do not hinder economic growth
• Clear and comprehensive information empowers clients to navigate the financial landscape with confidence