The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
Written by Gaynor Pengelly, Journalist, Hitec
A major challenge for companies working to eliminate bribery and corruption is third party risk.
Growing regulatory and enforcement activity has led companies to plough vast resources into maintaining high ethical standards and establish policies, infrastructure and processes to battle corruption.
But while carrying out due diligence on a potential supplier is one thing, training countless third parties on anti-corruption programs and keeping tabs on their ethics and compliance is quite another.
Failure to implement high standards and robust policies and procedures leaves a company exposed. All too often corruption risk is at the sharp end of the supply chain, far away from head office, out in the field where workers are motivated by revenue and profit rather than compliance.
The only way to build a strong organisation is to implement a single global standard of business practice that is dynamically communicated, strictly enforced and passed on to employees, suppliers and agents.
All firms that are subject to the Financial Conduct Authority’s (FCA) Money Laundering Regulations 2007 must give overall responsibility for Systems and Controls (SYSC) to a Director or Senior Manager. They should know about third party and supply chain risks and ensure steps are taken to mitigate those risks.
The FCA requires firms to provide documented evidence of processes and ongoing monitoring. All firms must do their own monitoring and take reasonable steps to do the same with the activities of partners.
But while Board and Senior Managers know about third party and supply chain risk, do all their employees?
Ensuring that employees understand the value and importance of money laundering policies and procedures is critical for regulatory compliance.
One way to demonstrate best practice is to implement an industry standard policy management solution that ensures a clear compliance audit trail for the benefit of the Board, senior management, auditors and regulators.
Policy management software ensures the right policies and procedures get to the right people, that they become accountable by signing up to them and that the entire process is recorded and auditable.
Offsets are another major challenge facing global companies. Expanding into new geographical territories carries an increased risk of supply chain risk because companies often rely on local agents or representatives who know the market, country, institution and ‘how to get things done’.
Risk management software is an effective way of managing risk and controlling and mitigating the likelihood of an event taking place in the first place.
Regulated businesses are also required to evidence the adequacy of access to and the security of its records so that it can demonstrate compliance to anti-bribery policy and adherence to SYSC 9.
Enterprise content management (ECM) software provides complete control over the capture, indexing, archival, retrieval, accessibility and delivery of every item of business-critical content via a single, secure, central repository, providing a clear audit trail.
But while Britain continues to take great strides in creating a fairer, ethical, more transparent business world – no matter how much effort, energy and expertise they bring to bear – fraud, bribery and corruption are unlikely to vanish.
As FCA prosecutions rise, it is crucial that organisations address supply chain risk now rather than wait for the devastating impact of a negative event.
For more information on how Hitec’s innovations help organisations to mitigate supply chain risk visit: http://www.hiteclabs.com/campaigns/third-party-supply-chain-risk/