Page 152 - Bank-Muamalat-Annual-Report-2021

150 BANK MUAMALAT MALAYSIA BERHAD
ABOUT US OUR LEADERSHIP OUR STRATEGY OUR PERFORMANCE

STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL

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