The Industry Compliance and Risk Management in Banking Part. III

Small companies portfolio management, often without record keeping function or UCITS depositary, are less likely than large private banks in the image of SG Private Banking and BNP Paribas Private Banking in France. The second, also known as reputation risk, is the potential risk of impairment of the company following the completion of an operational risk and is currently a major concern of private banks. Indeed, rather than retail banking, private banking built its success on its relationship with its customers and their perception of the bank whose image can be up to 80% of the value.

However, as evidenced by the reputational risk, difficult to materialize, quantify the value added of industry compliance is complex. As new operational risks ahead, the error would be to relegate to second place on the grounds that the instances of existing controls (risk, legal, internal control) are enough to support them. Most private banks have assimilated with seven out of ten organizations consider that the function is used to reduce or eliminate the costs of non-compliance [2]. The integration at the heart of the relationship with third party may even allow them to be a strategic advantage. On the one hand, customers are demanding their private bank integrity and accountability increased, the values defended by the industry compliance. Moreover, by making visible the intervention of the department compliance, managers can strengthen their relationship of trust with the customer and demonstrate that it has confidence of stakeholders in case of dispute. Of course, this procedure will remain balanced in order not to go against the productivity of managers.

Who says balanced does not mean limited. On the contrary, it is perfectly conceivable that in the future, the scope of intervention of the function widens, in private banking as in other areas of banking (investment banking, retail banking, and asset management). This could exceed the regulatory and ethics to include ethical and social values, thus meeting the new requirements of customers and shareholders, among others...