Transformation Of A Joint-stock Commercial Bank's Compliance Risk Management Process

Financial industry, especially banking, means enterprises which operating business risks and credit. Therefore, the ability of managing business risks decides its core competitiveness to a great extent. With the rising of the complexity and fluency of management and innovation of modern banking, the risky factors that the banking encounters are getting more complex and convert. Particularly after the opening up of China financial industry, and with the entry of foreign owned banks, domestic banking has to face cut-throat competition.In recent years, there is a tendency that the domestic and foreign banks suffer increasing loss due to ilcompliance operation. The experiences had shown that, the defect of compliance risk management will lead to the break out of credit risk, deception risk, reputation risk and operation risk, or may even threat the existence of banking. Therefore, enhance compliance risk management, effectively control compliance risk have become a very important and urgent problem for commercial banks to deal with, a internal sustainable and stable motivation for the banks development. However, because the compliance risk management was just introduced to China within a few years, because of the late start of compliance risk management in China, the administration structure of compliance risk management doesn't really match the business development, misunderstanding of compliance risk management still exists, and the operation of compliance risk management doesn't obey the standards.This article elaborates, collates and analyzes the defects of compliance risk management exist in domestic and foreign banking through systematically collating, analyzing the view points of compliance risk management of present domestic and foreign banking, based the Compliance Risk Management Index of Commercial Banks issued by China Banking Regulatory Commission, combined with mainstream methods in compliance risk management theories from commercial banks in domestic and foreign banking, in connection with the meanings, techniques, requirements, regulations and main managerial approaches.Combined with own working experience,I offers some advices in altering the procedures of compliance risk management. By altering the procedures of compliance risk management, which means getting the results of enhancing, completing compliance risk management by initially distinguishing compliance risk management, initially evaluating compliance risk management, initially controlling and tracing whole procedure of compliance risk management. The procedures alternation of compliance risk management mainly realized by establishing response mechanism and observation system. Though the response mechanism, we could solve the mismatch between the financial products which develop rapidly recently and financial innovation, management level of compliance risk management. Mismatch between the laws, regulations and standards, changing of observation and the managerial level of compliance risk management, we need to further clear, regulate compliance risk management procedures. Through establishing compliance risk observation system, we could overcome the current situation that bank still lacks advanced compliance risk observation system, enhancing managerial efficiency by the help of information technology.This article elaborates the working procedures of policy responding system, systematic requirements of compliance risk management observation, and feasible programs by describing the backgrounds of the alternation of compliance risk management procedures. In addition, this article also offers tentative plans for the further improvement of compliance risk management procedure and compliance risk management observation system.The transformation and quest of compliance risk management in commercial banks offered by the writer, is the main innovated concept. Hopefully, they can be enlightening, and some useful attempts of compliance risk management in commercial banks could be carried out. Aiming to offer some plain suggestions to improve the ability of effectively control all different types of compliance risk management, improve the efficiency of compliance risk management in commercial banks by completing business procedures of compliance risk management, system, relying on observation system of compliance risk management that developed by information and internet system.