The purpose of the Regulatory Compliance function is to assess and provide guidelines for the business lines to help define their strategy, ensuring compliance with applicable legislation at all times. With this in mind, all areas of the Compliance function spare no efforts in enhancing the training activities of its commercial staff.
To achieve these objectives, the Regulatory Compliance function is integrated into Bankinter through an internal institutional framework that revolves around the Corporate Control and Compliance Division, which includes the areas that operate as second lines of defence (Risk Control and Internal Validation, Financial Control and Analysis, Regulatory Compliance and Anti-Money Laundering and Counter Terrorism Financing).
This organisational structure allows the information systems of all second level control areas to be standardised and provides them with the necessary independence to carry out their duties, in line with best practices in this field. This enables the Bank to adequately manage the risk of failing to comply with regulations, which also entails significant reputational risk, with a potentially adverse impact on relations with customers, markets, employees and the authorities. In particular, failure to comply with regulations may lead to sanctions, damages or cancellation of contracts, thereby harming the Bank's image.
The Regulatory Compliance and Control division has implemented a risk measurement methodology that is shared across all of the entities in the organisation. This methodology enables: coordinated management of all risks at the Group level, while respecting the characteristics and specific requirements of each country; better coordination of second level control areas at the global level; simplification of the reports and controls in the organisation, by establishing common policies and procedures; and a single control methodology consistent with new international standards for internal control.
The application of this risk measurement methodology for regulatory compliance and anti-money laundering and terrorism financing, and its monitoring through a tool (SAP GRC) common to all areas of the division, was entrenched in 2023.
The first phase in the design and definition of a corporate taxonomy of Bankinter Group processes was also completed in 2023. This project will enhance the three lines of defence model and the identification and measurement of the main risks in the entity's processes, and governance will be strengthened with a comprehensive focus on risks.
Bankinter developed the basic areas of the control and compliance function under this regulatory and institutional framework through the following four units in 2023:
The Corporate Control and Compliance division has responsibilities extending to all areas and provides support to the Group's governance bodies. In particular, it participates in the following bodies:
The regulatory compliance committee. This is the senior management body that monitors the Bank’s compliance policies according to the charter of the Regulatory Compliance function. The committee executes policies in relation to regulatory and compliance matters established by the board of directors' risk and compliance committee.
The products and operational risk committee. This is the body for governance of the products and services that Bankinter offers to customers in accordance with the product governance policy approved by the board of directors.
The internal control body. This body is responsible for establishing and ensuring compliance with policies and procedures for preventing money laundering and the financing of terrorism, in accordance with Bankinter Group's prevention framework.
The agent acceptance committee. This committee is responsible for approving the partnership relationships of Bankinter, S.A. with financial agents and financial advice companies.
In addition, in support of the board's supervisory duties, other specialised committees have been set up by senior management in which the Corporate Compliance and Control division participates to ensure effective and homogeneous risk management, such as the crime prevention and professional ethics committee.
Bankinter Group has assigned the competencies of identifying and reporting regulatory changes to the Regulatory area, which reports to the Office of the General Secretary. The Regulation area facilitates early detection of the potential impacts of regulatory changes, reducing their risks. Every year it prepares a three-year regulatory map that serves as the basis for the relevant strategy.
Cross-cutting management of regulatory change was carried out during the year, participating in various projects that required the adaptation of Group activities or processes. These include the following:
Other new developments that required in-depth regulatory analysis and some internal adaptations included the publication of the Spanish Securities Market Act and its implementation through several royal decrees, and the CNMV Resolution on intervention measures for products related to financial contracts for differences and other leveraged products.
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