Fintechlab — Forecasting the Future with MKB’s Experts
Welcome to our newest series, where we ask leading experts from MKB Bank to share their predictions and insights about what the future might hold for the financial sector. Read through these short interviews to get a sneak peek about how they see tomorrow’s fintech world!
In the next part of the series,András Bácsfalvi, MKB Bank’s Chief Compliance Officer shared his thoughts about the Compliance Directorate’s current situation and what kind of effects shape the regulations of this area.
András, please tell me about MKB Bank’s Compliance Directorate; how would you describe your department’s everyday work?
First, I would like to describe the concept of compliance: in general, compliance means conforming to a rule, such as a specification, policy, standard or law. In day-to-day practice, it means that MKB Compliance’s Directorate is responsible for facilitating compliance with the law. Within the bank, we deal with money laundering prevention, investor protection, consumer protection, as well as conflict of interest issues, and the Code of Ethics also belongs to us.
There are three departments at MKB Bank’s compliance: the money laundering prevention department deals with — among other things -, onboarding / customer acceptance and KYC (know your customer) issues. In addition to investment protection, the Money and Capital Market Compliance Department also deals with the so-called Chinese Wall. In finance, a Chinese Wall (or a Wall of China) is a virtual information barrier erected between those who have material, non-public information, and those who don’t, to prevent conflicts of interest, so basically an information lock between certain areas to prevent sensitive information from leaking out, as this could seriously harm both the bank and the customer. The third one is the General Compliance Department, where we deal with ethical and conflict of interest issues and consumer protection.
How can the compliance culture be developed and how do you see the current situation of it at the MKB Bank?
I think compliance culture in general is constantly developing worldwide, and within MKB Bank it has developed a lot in the past few years. It is reflected in the number of the staff, because more colleagues are involved in compliance than before, and also in the fact that the importance of the issue is taken more and more seriously. The management has recognized the importance of compliance, but the regulatory side has a strict framework also. Within the bank, two media can do a lot in development: compliance and senior management, because if they recognize the importance of it and act accordingly, it is a recipe for increasing this culture.
To simply illustrate: not (only) Compliance should be compliant, but all employees of the bank. We have a responsibility to create a good framework, but at the end of the day, everyone has to follow the rules. This requires us to be seen as a partner and to have a relationship of trust, but we also need everyone to feel bounded by the rules to apply them.
How has COVID-19 affected on te life of the Compliance Directorate?
We had to pay more attention to certain things, because we are working with sensitive datas, so basically we worked in the office during the first wave as well as now, but in my opinion both the bank and our department performed well during this period.
What external or internal things effects on the rules of compliance, thinking of here current situations, that concern a large number of people nowadays?
Basically consensual things develop the compliance culture, in which people has consensual aggreement. Current situations around the world can have an impact on compliance, for example, a code of ethics needs to be fine-tuned, but I think a good compliance think about these issues from the outset, covering all areas and aspects and treating everyone equally.
More and more people are realizing that this is an imporant area, one that is a good tool to support the bank to operate prudently. I think everything is given for develop the compliance culture and we are basically moving in the right direction. It is important to note that compliance is not a restraining activity, but a function of understanding, advising, and controlling the business. We do not need to emphasize what is not allowed, but we need to think about a solution that requires a complex knowledge, as we have to take into consideration many factors at once and have a wide range of knowledge, and I believe that is maximally presented at MKB Bank.
