{"id":15150,"date":"2021-05-20T14:00:51","date_gmt":"2021-05-20T11:00:51","guid":{"rendered":"https:\/\/modecon.mnau.edu.ua\/?p=15150"},"modified":"2021-05-24T13:50:58","modified_gmt":"2021-05-24T10:50:58","slug":"the-essence-of-compliance-and","status":"publish","type":"post","link":"https:\/\/modecon.mnau.edu.ua\/en\/the-essence-of-compliance-and\/","title":{"rendered":"Sheludko S., Yehorova A. The Essence of Compliance and its Place in Banking Risk Management"},"content":{"rendered":"

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JEL Classification<\/strong>: G21; G32<\/i>
\n<\/span><\/td>\n		DOI<\/b>: https:\/\/doi.org\/10.31521\/modecon.V26(2021)-26<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[\/vc_column_text][vc_column_text]<\/p>\n

Sheludko Sergii<\/b>, PhD (Economics), Associate Professor of the Department of Banking, Odesa National Economic University, Odesa, Ukraine<\/span><\/p>\n

ORCID ID:<\/strong> 0000-0003-0636-4940<\/a>
\ne-mail:<\/strong> s.szeludko@gmail.com<\/a><\/p>\n

Yehorova Anastasiia<\/b>, Student of the Faculty of Finance and Banking, Odesa National Economic University, Odesa, Ukraine<\/span><\/p>\n

ORCID ID:<\/strong> 0000-0003-0030-8307<\/a>
\ne-mail:<\/strong> anastasiia.eee@gmail.com<\/a><\/p>\n

 <\/p>\n

The Essence of Compliance and its Place in Banking Risk Management<\/b><\/h2>\n

 <\/p>\n

Annotation. Introduction<\/b>. The versatility of modern international banking, instability of the global financial environment and dynamism of normative regulation necessitates a strong need not only to implement standards and regulations of banking, but also to follow such guidelines and monitor compliance with their principles and norms. In such conditions, the study of the essence, organizational and economic principles and features of the practical implementation of compliance in banks is a particularly important scientific task.<\/span><\/p>\n

Purpose<\/b>. The aim of the paper is to study the scientific and theoretical foundations, analysis of the compliance system in conditions of internationalization of the banking business.<\/span><\/p>\n

Results.<\/b> It has been determined a historical prerequisites of \u201ccompliance\u201d and it has been offered the own definition of compliance which means a system of the actions carried out for the purpose of observance of internal rules and external requirements at the same time as a whole by the organization, its separate divisions and employees. It has been confirmed the essential value of the qualitative classification of banking risks, which is used as a result to find reserves to improve the efficiency of risk management of banking operations. The compliance system has been presented in terms of elements that affect the implementation of compliance risk. Compliance risk as a non-financial banking risk has been studied and determined that it can be both a source and a consequence of the realization of other types of risk. It has been analyzed the structure of compliance costs of banks and financial institutions of European Union in 2019.<\/span><\/p>\n

Conclusions.<\/b> In order to increase effective compliance control in the international banking business, artificial intelligence technologies are used. It has been concluded that in the future banking institutions should focus on developing a strategy that will at the same time reduce costs and maintain a reliable system of compliance.<\/span><\/p>\n

Keywords:<\/b> compliance; compliance control; compliance risk; international banking business; risk.<\/span><\/p>\n

References:<\/strong><\/p>\n

    \n
  1. Kalinichenko, L. L. (2014). Theoretical aspects of compliance in domestic banks. <\/span>Naukovyj visnyk Khersonsjkogho derzhavnogho universytetu<\/span><\/i>. Serija : Ekonomichni nauky, 6 (4), 242-245 [in Ukrainian].<\/span><\/li>\n
  2. Sarakhman, O. M. & Kozjol, V. (2015). Functioning of compliance control in domestic banking. <\/span>Bukhghaltersjkyj oblik, analiz i audit<\/span><\/i>, 2\u00a0(112), 87-90 [in Ukrainian].<\/span><\/li>\n
  3. Kovalenko, V. V. (2017). Risk management system in banks : theoretical and methodological aspects. Odesa : ONEU [in Ukrainian].<\/span><\/li>\n
  4. Cjucjak, A. L. (2011). The implementation of the compliance control in the domestic system of independent financial control and audit. <\/span>Naukovo-informacijnyj visnyk \u00abEkonomika\u00bb<\/span><\/i>, 3, 200-206 [in Ukrainian].<\/span><\/li>\n
  5. Pererva, P. Gh.,\u00a0 Kocysky, D., Vereshne Shomoshy, M. & Kobeleva, T. A. (2019). Compliance program of an industrial enterprise. Kharjkov\u2013Myshkoljc : NTU \u00abKhPY\u00bb, 689 [in Russ.].<\/span><\/li>\n
  6. Griffith Sean, J. (2016). Corporate Governance in an Era of Compliance. <\/span>William & Mary Law Review<\/span><\/i>. Vol. 57. No. 6; <\/span>Fordham Law Legal Studies Research Paper<\/span><\/i>. \u2116 2766661. Retrieved from : <\/span>https:\/\/ssrn.com\/abstract=2766661<\/span> [in English].<\/span><\/li>\n
  7. Misha, E. (2016). The Compliance Function in Banks and the Need for Increasing and Strengthening its Role \u2013 Lessons Learned from Practice. <\/span>European Journal of Sustainable Development<\/span><\/i>, Vol. 5, No. 2, pp. 171-180. DOI: 10.14207\/ejsd.2016.v5n2p171 [in English].<\/span><\/li>\n
  8. Study on the costs of compliance for the financial sector. Retrieved from : https:\/\/op.europa.eu\/en\/publication-detail\/-\/publication\/4b62e682-4e0f-11ea-aece-01aa75ed71a1 [in English].<\/span><\/li>\n
  9. The True Cost of Compliance with Data Protection Regulations (2017). <\/span>Ponemon Institute<\/span><\/i>. URL: https:\/\/dynamic.globalscape.com\/files\/Whitepaper-The-True-Cost-of-Compliance-with-Data-Protection-Regulations.pdf [in English].<\/span><\/li>\n
  10. Zulfikar, R., Lukviarman, N., Suhardjanto, D., Ismail, T., Dwi Astuti, K., and Meutia, M. (2020). Corporate Governance Compliance in Banking Industry: The Role of the Board. Journal of Open Innovation: Technology, Market, and Complexity<\/i>, Vol. 6 (4), No. 137. Retrieved from :\u00a0https:\/\/www.mdpi.com\/2199-8531\/6\/4\/137. DOI: 10.3390\/joitmc6040137 [in English].<\/li>\n<\/ol>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Received: <\/strong>13\u00a0March 2021<\/span><\/strong><\/p>\n

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    Sheludko S., Yehorova A. (2021). The Essence of Compliance and its Place in Banking Risk Management. Modern Economics<\/em>, 26(2021), 173-177. DOI: https:\/\/doi.org\/10.31521\/modecon.V26(2021)-26.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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    [vc_row][vc_column][vc_column_text] JEL Classification: G21; G32 DOI: https:\/\/doi.org\/10.31521\/modecon.V26(2021)-26 [\/vc_column_text][vc_column_text] Sheludko Sergii, PhD (Economics), Associate Professor of the Department of Banking, Odesa National Economic University, Odesa, Ukraine ORCID ID: 0000-0003-0636-4940 e-mail: s.szeludko@gmail.com Yehorova Anastasiia, Student of the Faculty of Finance and Banking, Odesa National Economic University, Odesa, Ukraine ORCID ID: 0000-0003-0030-8307 e-mail: anastasiia.eee@gmail.com   The Essence of
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