Enterprise Compliance Risk Management. Ramakrishna Saloni

the family – thank you for creating and reinforcing the positive energy circle around me. I offer my respectful tribute to my mother, Smt. Suguna Pisipati, for supporting and celebrating all my achievements, big or small.

      My appreciation and sincere thanks go to the senior practitioners, Dr. Colin Lawrence, Tsuyoshi Oyama, Dr. Ranee Jayamaha, Benjamin Frank, and Peter Hill. Each of these experts have, in their own way, added to the industry's dialogue. I am grateful for their Practitioner's Notes that prefix the five parts of this book. All of these industry veterans have readily agreed to share their distilled wisdom and bring to bear their real-life experiences through these notes. My thanks also go to K. S. Gopal, head of the Regulatory desk of ING-Vysya bank for being part of many animated conversations on the subject. Thanks are due to the regulatory bodies for creating a learning ecosystem through their websites by sharing industry information in an open and transparent manner.

      I wish to place on record my gratitude to my organization, Oracle Financial Services Software Limited, and thanks to Stuart Houston for encouragement and support. In the 15 years of my association with Oracle, the information company, I have learned to truly appreciate the critical role technology plays in enabling businesses to build a robust, active, positive risk and compliance program.

      A special note of thanks to the team at Wiley – Jeremy Chia, my development editor; the editorial team; and the entire production team. There are many others who have added to my learning canvas whom I need to thank: bankers, regulators, consultants, IT professionals, self-regulatory body representatives, financial services industry association members, friends, colleagues, and customers with whom and through whom I have seen, learned about, appreciated, and loved this industry.

      About the Author

      Saloni Ramakrishna has nearly three decades of experience in financial services, contributing to the industry dialogue across different platforms. She has been invited to share her thoughts and views on industry trends surrounding compliance, risk, customer centricity, performance, and data management in the analytics space, by national and international banking and finance forums such as the Global Association of Risk Professionals (GARP), Ops Risk Asia, Asian Banker events, and CXO roundtables.

      Saloni Ramakrishna's ideas have appeared as articles and quotes in regional newspapers, journals, magazines, and television interviews. She has presented papers at national and international seminars and conferences. Since 2012, she has been a columnist for one of India's leading monthly magazines, Andhra Bhoomi.

      Saloni Ramakrishna is currently the Senior Director with Oracle. In her role as Global Solutions Architect of Oracle Financial Services Analytical Applications, she frequently interacts with top and senior management of banks, consulting professionals, financial services bodies, and senior regulators across multiple countries. In her 15-year tenure with Oracle Financial Services she has designed, developed, architected, and implemented analytical solutions for the industry.

      Saloni Ramakrishna is a double master's degree holder – Master of Business Administration in Finance and Master of Arts. As a banker, with a deep and broad landscape of banking experience spanning almost 15 years with specialization in risk, performance, and compliance, she was part of policy-making bodies, both at the banks where she has worked, as well as on industry-level committees.

      In Enterprise Compliance Risk Management: An Essential Toolkit for Banks and Financial Services, she brings this kaleidoscope of rich hands-on experience of real-life financial services knowledge, distilled wisdom of interactions with different stakeholders of the industry, and experience of technology power to create a vibrant canvas of comprehensive yet practical solutions for the compliance-related business challenges of the financial services.

      Opening Notes

      When I first thought of writing a book, the advice from a friend (an author himself) was “Don't do it!!” Don't do it: It is not as romantic as it appears; it is too demanding; you are on your own, plodding through thousands of pages that take you off on a tangent. New ideas fight to find expression only to have most of your writing and rewriting edited later. Days get longer and slip from your hands while fighting deadlines. You will become a recluse as all your time is occupied with digesting the mountain of information and plethora of thoughts. Don't do it if you think there is money or fame in it – there may not be. Don't do it, except if the subject interests you and you are excited about sharing it with others. Thanks, Chris Marshall, for that sane advice!

      Flowing from that advice, I chose compliance risk management, a young, evolving, layered, and intricate discipline. As a hands-on practitioner in the financial services industry for almost three decades, I have interacted with different stakeholders – seniors from banks and financial institutions, regulators, business consulting, technology providers and industry bodies – and have garnered a distinct canvas of knowledge in the compliance field that needs to be shared through a credible medium (and, thus, this book). I truly believe that done right, active and positive compliance is a value multiplier for business. The content is a blend of the body of knowledge gained through first-hand experience and wisdom from industry participants though interactions with relevant stakeholders, which gives it a distinct real-world perspective.

      Demystifying a subject like compliance risk management, a fabric with many hues, at once an art, a craft, and a science, was demanding to say the least. The task was challenging and therefore creatively stimulating. The attempt is to go beyond evangelizing the relevance of compliance to bring real-world experiences in the arena of banking and financial services and to capture the changing contours of the subject as well as draw out compliance risk as a distinct risk discipline, thus enriching the dialogue and contributing to the healthy growth of this young and dynamic subject.

      The narrative is shaped by the distinct influences of two of my mentors, the first one taught me that “all fundamentals are simple and straightforward and do not need the garb of jargon to claim their rightful place. You resort to jargon when you want to camouflage the fact that you are not clear.” The mantra of the second mentor was “Elevate the debate, energize the dialogue, and go from what it is to what it can be. That is how growth and progress happens.” The tone of the book, therefore, is simple and straightforward. The attempt is to elevate the context of compliance from its current reactive stance to how a proactive strategy can create a clear differentiator in a largely undifferentiated market and become a powerful competitive weapon for the organization.

      The main theme underlying the book is that it pays to responsibly grow business by enhancing stakeholder value. It encapsulates the following subthemes:

      • Integrity at the core of responsible business

      • The distinction between business and “healthy” business

      • “Win-Win” approach for all stakeholders as the secret for sustainable growth

      • Active compliance management as “strategic tool” in value creation, preservation, and enhancement

      This book contains relevant information for all of the stakeholders of the financial services industry.

      Design and Structure of the Book

      This book seeks to address three principal objectives:

      • To serve as a practitioner's handbook by detailing the process, content, and operations of compliance while acknowledging real-life issues

      • To transcend the rhetoric and move compliance into a business model and business operations arena by bringing to the fore the role and relevance of positive and active compliance management in value creation for organizations

      • To contribute to the growth of the narrative of this young, evolving discipline and serve as a reference literature on compliance and its risk management in financial services

      The book is divided into five parts: To set the real-world context, every part is prefixed with Practitioner's Notes, thoughts shared by real-world practitioners from the financial services on the themes of compliance. Each of them has experienced compliance from different perspectives. Three of them have been senior regulators of their respective countries in addition to other roles, and two of them are senior bankers. They bring their experience to bear through