International Conference on Compliance Trends for Financial Institutions 2018 & Beyond

From left: Moderator Daily FT Editor in Chief Nisthar Cassim, National Development Bank AVP Compliance Manique Kiriella Bandara, Standard Chartered Bank Head of Compliance Inam Cassim, Central Bank Finance Intelligence Unit Assistant Director Ayesh Ariyasinghe and Nations Trust Bank Chief Operating Officer-Senior Executive Vice President Thilak Piyadigama

The Sri Lanka Association of Australia Awards Alumni (SLAAAA) held its second annual conference ‘The International Conference on Compliance Trends for Financial Institutions 2018 & Beyond’ on 12 July, at Galle Face Hotel, Colombo. More than 120 compliance professionals from the financial sector including the policy makers and the top regulators of the country participated in the event. 

Australia Awards Alumni’s President Anusha Nishanthi welcomed the distinguished audience and noted the Association’s commitment to promote good governance as a part of its core strategies with the objective of making an impact and contributing to the sustainable development of Sri Lanka. With 20 experts sharing insights and practical solutions to the most challenging issues that are faced by the compliance officers in the financial sector, this event provided one of the best platforms to the compliance professionals in Sri Lanka. The event had four main sessions and covered a wide variety of topics, including anti money laundering, artificial intelligence, investment compliance, technology priorities for compliance and compliance profession. 

State Minister of Finance Eran Wickramaratna attended the event as the Chief Guest, proving that the financial sector compliance is considered important for the country’s development. Australian High Commissioner to Sri Lanka Bryce Huchesson also attended the event as the Guest of Honour. He set the tone in his opening remarks and emphasised the importance of having a compliant financial industry in Sri Lanka for its development goals and further deliberated the Australian experience where Sri Lanka could learn from in order to reach the international standards. 

Securities & Exchange Commission of Sri Lanka Director General Vajira Wijegunawardane delivering the keynote speech at the conference discussed the proposed new SEC Act requirements and the SEC’s standpoint in relation to capital market compliance and governance matters. Wijegunawardane went on to state, “There is a concerted in-house effort to formulate minimum standards for all market intermediaries, to review all existing bodies of rules and to draft rules for new categories of regulatees. The new scheme for licensing and registration will cover both regulated entities and individuals. The reach of our standards on fitness and propriety will extend so far as to cover the ultimate beneficiaries of the entities to which such standards apply, with a view to enhancing our cooperation with ongoing anti-money laundering and countering the financing of terrorism efforts.” Further emphasising on the compliance culture, he stated that in financial markets, where trust and confidence are decisive of institutional success, a set of values provide firms with considerable mileage; more so perhaps than the financial advantage of preserving business value, or the evolutionary advantage arising in relation to increased agility in responding to change, regulatory or otherwise.

Talking about the future market growth and performance and corporate culture, Wijegunawardane said that a culture of integrity, underpinned by a sound adherence to business ethics, is the best way forward. Concluding his remarks he stated that “I urge you, then, to bear in mind the need not only to strive towards compliance with regulations by monitoring global developments, emulating emergent compliance trends and adopting cutting-edge technological tools, but to also consider the role you can play in demonstrating corporate stewardship by adopting a values-based corporate culture.” 

Central Bank of Sri Lanka Assistant Governor Yvette Fernando, during her keynote speech appreciated the efforts of SLAAAA for organising a forward-looking event of this nature to deliberate on a range of important themes relevant and timely for financial institutions on the changing regulatory landscape. Fernando highlighted the responsibilities of the Board of Directors and the senior management of financial institutions for better compliance management.

Talking about new compliance requirements such as adoption of BASEL III, she stated, “The Central Bank of Sri Lanka by adopting Basel III requirements aims to ensure that banks develop a culture of maintaining sufficient level of capital and liquidity in the required quality in relation to their risk profile, thereby minimising the requirement for regulatory action or intervention at times of financial instability. It is important to stress that the risk management process underpinning the BASEL framework is vital and relevant to most financial institutions.” Commenting on adoption of IFRS 9 she stated that “the shift towards an expected loss model is projected to impact the impairment assessment of financial assets. While the Central Bank has already ascertained the industry wide impact of its adoption it is most likely to facilitate the adjustment of its impact on a staggered basis.”

Fernando also touched upon the current FinTech developments and went on to state, “This could lead to more competition for incumbent financial institutions from non-traditional players in an already challenging market environment, which could impact the sustainability of their earnings, however such developments could also put pressure on banks to improve digital interfaces to better meet customer expectations.”

The Assistant Governor also acknowledged that rigid regulatory or supervisory positions could lead to unintended consequences, such as the movement of innovations outside of the regulated industries, potentially creating greater risks and less transparency and said to this end the implementation of the regulatory sandbox by the Central Bank is a key step in the way forward. Concluding her remarks, Fernando stated that a healthy compliance culture should be developed and permeate down to the lowest level functionaries in the financial institutions. 

GRC Pundit from USA Michael Rasmussen, Optiver Australia Chief Compliance Officer Asia Pacific Region Anatoly Kirievsky, CSE Chief Regulatory Officer Renuke Wijayawardhane, SEC Director Supervision Gayani Godellawatta, Financial Intelligence Unit of Sri Lanka Senior Assistant Director Ayesh Ariyasinghe and GRC and Cybersecurity Professional Sujit Christy were some of the high profile speakers and panellists at the event.  

National Savings Bank (NSB), as a leading bank in the country joined with SLAAAA as the Platinum Sponsor of the event to promote compliance in the financial services industry while Daily FT supported the cause as the Official Newspaper of the event.  

(Sri Lanka Association of Australia Awards Alumni serves as an alumni association for all Australia Awards (an Australian Government funded scholarship program) awardees from Sri Lanka. The Australia Awards Scholarships Program has been an important component of the Australian Government’s official development assistance program to Sri Lanka since the Colombo Plan initiative in the 1950s. The Australia Awards program promotes knowledge, education links and enduring ties between Australia, its neighbours and the global community.)

Pix by Ruwan Walpola