Cellou Diallo, Director of Compliance Ecobank Senegal, gave an interview to our colleagues from Lejecos. According to Mr. Diallo, compliance is not an option, but a requirement within his company.
Mr. Diallo, if you had to define banking compliance, what would you say?
It can be understood as processes which ensure that the behavior of the bank, its managers, its employees, its partners and its shareholders adheres to the legal and ethical standards that apply to them. In this context, the processes in question involve all components of the bank, from general management to employees, including partners as well as all stakeholders. There are therefore two aspects: the regulatory and legal aspect as well as the ethical aspect.
As evidenced by the recent sanctions imposed by the Bceao on certain banks in the area, shortcomings have been noted in the banking sector in the fight against money laundering and financing of terrorism. In your opinion, how can the system of the compliance at this level and what are the operational difficulties?
Regarding the improvement of the system, the fundamental action in my opinion relates to the support of stakeholders internally (managers, staff, etc.) and externally (partners, customers, etc.). It is important that the issues are well understood for proper implementation of the compliance system. In this context, emphasis must be placed on training and awareness. The idea is that beyond the sanctions that are brandished, we must make people understand the issues and the purpose of compliance. And from this point of view, I am going to quote Marie Anne Frisson Roche, director of the Journal of Regulation & Compliance……, who said that “Compliance is the pursuit of monumental goals”. And these monumental goals can be negative in nature such as preventing money laundering, corruption, human trafficking or in a positive way such as obtaining the protection of the environment, personal data, equality between human beings and the converging whole towards a unified goal which is the protection of Humans.
For the record, the problem of compliance was born with the crisis of 1929 in the United States. The initiative was therefore intended to prevent systemic risks. It is this role of prevention that we must perceive rather than sanctions which, certainly, are a means of pressure.
As for operational difficulties, in practice compliance is likely to distort the rules for healthy competition between banks. When there is no harmonization in the application of compliance rules, this can be a source of unhealthy competition in the acquisition and retention of customers between a bank that rigorously applies the rules and another that does. less in their implementation.
How does Ecobank approach the rise in compliance requirements?
Very early on, Ecobank had a pioneering position in the sub-Saharan market. Apart from Western banks, we are one of the first African banks to establish a compliance department independent of other functions. For us, compliance is not an option, it is a requirement. We have zero tolerance for the risk of non-compliance. This tells you that Ecobank is uncompromising on this risk. We cannot do less because, it should be remembered, Ecobank is listed on three stock exchanges (Nigeria Stock exchange, Ghana Stock exchange and BRVM) in Africa, with reporting requirements that align with international standards.
Also, due to its high AML/CFT standards, the Ecobank group manages to maintain the banking correspondent relationships of its subsidiaries operating in countries classified as “high risk” by the FATF. However, if you do not have an anti-money laundering framework that complies with international standards, you cannot have and maintain these correspondent banking relationships.
In terms of governance, is there independence between the Compliance function and general management?
Our subsidiaries in the UEMOA zone belong to a banking group and from this point of view, we comply with the requirements of the provisions of article 30 of circular 01-2017 relating to the governance of credit institutions and financial companies of the ‘UMOA; the control functions are hierarchically attached to the group’s control functions and on compliance issues, we report regularly to general management and quarterly to the subsidiary’s board of directors through its audit and compliance committee. .
During mergers and acquisitions, JV creations or other types of investments, do you systematically carry out specific compliance due diligence?
Interesting question because it refers to the requirements of FATF Recommendations 10 and 24, which deal respectively with customer due diligence and transparency in beneficial ownership. During these mergers and acquisitions, or JVs, if we fail to identify the beneficial owners or those behind them, this could be an opening for financial criminals to hide the proceeds of their criminal activities. It is therefore important to carry out research on these beneficial owners. In the African context, the difficulty we have is linked to the weakness of infrastructure which does not allow access to information and the centralization of registers. In the mining sector, for example, EITI standards now require the establishment of a register of beneficial owners.
Are efforts to manage and mitigate compliance deficiencies and risks undermined by revenue interests?
It is rather a mistake to see things like this, because there is no duality between the bank’s revenues and compliance requirements. Certainly there is a subtle dosage to be found to reconcile the two. As I said earlier, it is important to emphasize training and awareness with the aim of encouraging ownership by stakeholders. Certainly compliance has a cost but it is more of an investment than an expense.
Compliance, as Professor Mahmoud Mouhamad SALAH, professor at the University of Nouakchott, said, is not a luxury, it is the condition for economic development connected to universally recognized values, a means of reconciling respect for ethical rules with the requirement for efficiency.
The image of a bank being fundamental, why would the BCEAO not publish the list of non-compliant banks to encourage greater rigor?
I would like to remind you that ten or fifteen years ago, there were not even sanctions, so if today we are at this level it shows that we are making progress.
Do you have a technological tool like Artificial Intelligence (AI) capable of adapting to the increase in the volume and complexity of transactions?
AI represents an opportunity in monitoring transactions, to detect unusual behavior, or complex operations, which do not appear to have an economic justification and which may be linked to money laundering operations. In terms of detecting suspicious transactions, we have an obligation to put in place adequate tools and means.
With AI and machine learning, all this is done in real time based on an alert system. This is very important, especially as it will allow us to optimize the use of human resources allocated to Compliance.
With Lejecos Magazine
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