Page 154 - Bank-Muamalat-AR2020

152 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
About Us
ANNUAL REPORT FY2020

STATEMENT ON RISK MANAGEMENT AND

INTERNAL CONTROL

STATEMENT ON COMPLIANCE and institutionalised to escalate achievement of industry
best practices and elevate the staff understanding and
Regulatory compliance risk is defined as risk of failure by an competencies which emphasised on a number of focus areas
organisation to comply with applicable legal and regulatory such as anti-money laundering counter measures towards
requirements, which could result in fine or penalty or imposition strengthening the Bank’s efforts in fighting and preventing
of enforcement action by the regulators. In managing such financial crime; fair treatment of financial consumer and
risk, Bank Muamalat acknowledges that, operating in highly responsible market conduct practices in ensuring customer
regulated environment while pursuing business agenda to meet protection; and in terms of safeguarding customer information
the regulatory and supervisory expectations requires the Bank and management of permitted disclosure requirements.
to establish clear roles and responsibilities and embed strong Gaps analysis exercise on the regulatory documents
compliance risk management practices throughout the Bank. continues to be conducted to enhance early detection of
potential non-compliance issues and ultimately improve
Effectively managing compliance risk would also maximise the compliance level in the Bank. Independent reviews
the Bank’s opportunities in the competitive market place and are conducted to assess the adequacy and effective
strengthen Bank Muamalat’s competitive edge by building implementation of the regulatory requirements with the
trust and market positioning in a more timely and dynamic objectives to ensure material regulatory gaps are identified
manner. Recognising these challenges, Bank Muamalat is and adequately managed. This includes Shariah compliance
continuously strengthening compliance culture across the and credit-related matters.
Bank involving all level of staff and across all of its business
activities. In managing the integrity and fraud risk within the Bank,
the Anti-Bribery & Corruption Policy was formulated and
The Board, Chief Executive Officer and Senior Management adopted across the Bank. It represents the Bank’s stance of zero
are responsible in setting the tone from the top outlining the tolerance to bribery and corruption practices and serves
Bank’s overall compliance management programme consistent to protect the Bank from adverse integrity and reputation
with the objectives of the regulations and for the betterment which will undermine the support and confidence of the
of the society as a whole. The Board through the Board stakeholders.
Risk Management Committee and the Board Compliance
Committee actively provides guidance and oversight on the As an effort to ensure that the implementation of various
overall compliance management agenda to ensure that all compliance measures are robust and targeted the material
staff are cognizant of this agenda and at the same time having business operations, the Bank is conducting Institutional
adequate safeguards properly embedded in the Bank’s daily Risk Assessment (“IRA”) on annual basis covering Money
operations via policies, operational guidance, code of conduct Laundering & Terrorism Financing (“ML/TF”) risks and
and also standard operating procedures in line with regulatory Anti-Bribery & Corruption.
requirements.
Acknowledging that robust and effective implementation
is key, the Bank continues to enhance its compliance risk
COMPLIANCE TRANSFORMATION PROGRAMME
management capabilities across the business operations
The compliance management programme is monitored and and process by strengthening the three (3) lines of defence.
implemented through a dedicated Compliance function In this model, the business units are expected to be fully
established to manage Bank Muamalat’s compliance risk aware of the compliance risk in every business decision
including AMLA and Shariah-related matters. This is achieved and embed sufficient control measures to manage their
via the Compliance Transformation Programme that cut across operations. At the second level of defence, structured
all Bank Muamalat’s operations ensuring that regulatory compliance functions are established which are deemed as
compliance risk management is sufficiently integrated in the responsible for risk identification, development of framework,
Bank’s business activities. monitoring implementation and reporting of the Bank’s
overall compliance risk. Internal audit as independent party
During the year, various operational guidance and training is responsible to review and evaluate the adequacy of the
programmes on key regulatory matters have been developed compliance framework and its effective implementation.