Research On Internal Control Issues Of Commercial Bank Under The New Situation

Banking business is faced with risk all the time and has influence on all aspects of people’s life. There are strong negative externalities if any problem happens to the operation or management of the banking industry. Effective internal control is an indispensable means of promoting the sound operation of the banking sector and the country’s good economic development. Internal control of commercial banks is a series of activities to coordinate daily operation and management process in order to help them achieve certain business and management objectives. And the main purpose of bank’s internal control is to prevent and control risks. Therefore internal control of commercial banks is very important in the healthy development of banking industry.The rapid development of the Internet finance has had a important impact on all aspects of people’s life, with traditional banking sector particularly prominent. Currently, the competition in the financial market is increasingly competitive and fierce competition in the market demands more for banking products and services, tools, and services business models. In the process of constant innovation of products and services and constant modernization of business models, banking is bound to face multiple risks. Commercial banks, in the innovation process, should adhere to the traditional business of commercial banks "Three" principle, in the pursuit of profit, while retaining liquidity, focusing on security, strengthen risk management and improve internal control system to ensure transaction security, information security and financial security.Internal control practices of commercial banks in China starts late, facing financial regulation and industry competition pressures, most commercial banks have gradually established internal control mechanisms, but the efficacy of implementation of internal control is still unsatisfactory, and some banks even establish an internal control mechanism deemed as the burden of regulation internally. We should avoid this misconception from the recognition; such erroneous thinking will not only affect the development of commercial banks, it is also not favorable for commercial banks to survive and develop in the fierce market competition, and may even result in all-round risks of our financial system.In this paper, based on the theoretical research and with specific case studies, the author elaborates on how to improve the bank’s internal control:firstly, improve the internal control environment of banks, improve rules and regulations from corporate governance, corporate culture to human resources and ensure strict implementation thereof; secondly, innovate means of risk identification and assessment, control risks at an earlier stage so as to avoid subsequent greater impact; thirdly, pay attention to improving business processes, clearly specify its function and power of each business position and its assessment standard, improve periodic position rotation, authorization and approval, and other control activities; and finally, in order to ensure that the internal control can effectively work, banks should also establish efficient communication mechanism to ensure timely and effective communication of information, at the same time with internal oversight.