Compliance Of Banks Research Articles

Towards Better Financial Governance: The Urgency of Model Risk Management in Indonesia Viewed Through Maqashid Shariah

This study assesses the adequacy of Model Risk Management (MRM) frameworks within Indonesian Islamic banking by utilizing Maqashid Shariah principles as a tool to align these frameworks more closely with global standards, specifically focusing on safeguarding life (Hifzh Al-Nafs) and property (Hifzh Al-Mal). Through a comparative literature review, this research examines the structure and effectiveness of MRM practices in Indonesia, referencing regulations such as POJK 65/2016 and SEOJK 25-SEOJK.03-2023, against those in developed financial markets such as the USA, UK, Europe, Japan, and UAE, with an emphasis on governance, lifecycle management, and internal audit processes. The findings suggest that Indonesia’s current MRM frameworks are somewhat rudimentary when contrasted with international norms. Key areas identified for enhancement include expanding the scope, enhancing governance structures, refining model lifecycle management, and strengthening internal audits and oversight mechanisms. By employing Maqashid Shariah principles as an analytical tool, this paper proposes enhancements to MRM frameworks that can significantly improve the stability and compliance of Islamic banks in Indonesia, promoting greater global competitiveness and adherence to Shariah principles. This approach not only integrates traditional MRM approaches with Islamic ethical standards but also provides a tailored framework for regulatory enhancements that support a stable, compliant, and ethical Islamic banking environment.

Leveraging Banking Financial Performance through Shari’ah Board’s Characteristics: Empirical Investigation

This study examines the impact of board characteristics on the financial outcomes of Shari'ah-compliant banks in Pakistan, with a particular focus on supervisory attributes such as board size, frequency of meetings, and independence in decision-making. The empirical analysis utilizes data from all Islamic banks of Pakistan over the period from 2021 to 2023, a timeframe chosen to evaluate financial performance in the context of post-pandemic economic challenges. Employing panel data analysis through multiple regression models, the study reveals that bank size does not have a significant effect on the financial outcomes. In contrast, the board size plays a crucial role in influencing financial success. Specifically, boards that are composed of independent members that meet regularly for strategic evaluations tend to achieve better financial performance. These results emphasize the importance of enhancing Shari'ah-compliant governance structures, particularly in the context of economic recovery. The implications of these findings suggest that to improve the decision-making process, Islamic banks should focus on quality and independence in board composition and prioritize frequent strategic assessments to improve financial outcomes.

The Transformative Impact of Financial Technology (FinTech) on Regulatory Compliance in the Banking Sector

Financial Technology (FinTech) has emerged as a disruptive force in the banking sector, revolutionizing the way financial services are delivered and consumed. This review explores the transformative impact of FinTech on regulatory compliance within the banking industry. The integration of advanced technologies such as artificial intelligence, blockchain, and big data analytics has enabled financial institutions to enhance operational efficiency, improve customer experience, and expand market reach. However, these innovations have also posed unprecedented challenges to traditional regulatory frameworks designed to safeguard financial stability and consumer protection. This review examines how FinTech innovations have necessitated regulatory adaptation and evolution. It highlights the complexities introduced by novel financial products, digital payment systems, and decentralized finance (DeFi) platforms, which often operate beyond conventional regulatory boundaries. Regulatory compliance in areas such as anti-money laundering (AML), know your customer (KYC) requirements, and data privacy has become more intricate as FinTech solutions blur geographical and jurisdictional lines. Moreover, the strategies employed by regulatory bodies and financial institutions to address these challenges effectively. These include leveraging regulatory technology (RegTech) solutions for enhanced monitoring and compliance automation, fostering collaboration between regulators and industry stakeholders, and advocating for agile regulatory frameworks capable of accommodating rapid technological advancements. Looking ahead, the review anticipates ongoing shifts in regulatory paradigms to accommodate the transformative impact of FinTech. It emphasizes the importance of proactive regulatory approaches that balance innovation with risk management, ensuring the integrity and resilience of the banking sector amidst a rapidly evolving digital landscape. This provides a comprehensive overview of how FinTech is reshaping regulatory compliance in banking. It underscores the need for adaptive regulatory strategies and collaborative efforts to harness the full potential of FinTech while safeguarding financial stability and consumer trust.

Efektivitas Pengawasan Syariah Dalam Menjamin Kepatuhan bank Syariah

Islamic banking in Indonesia has experienced significant growth in recent years, driven by the increasing demand for financial services that comply with Sharia principles and laws. The role of the Sharia Supervisory Board (SSB) is crucial in monitoring and evaluating the compliance of Islamic banks with Sharia principles. This study aims to analyze the effectiveness of Sharia supervision by the SSB in ensuring the operational compliance of Islamic banks with Sharia principles. The research method used is a literature study, collecting and analyzing data from various written sources such as books, journals, and related documents. The findings of the study indicate that the effectiveness of SSB supervision is influenced by the qualifications and understanding of SSB members on fiqh muamalat and modern Islamic finance. Additionally, the SSB plays a role in ensuring that the products and services offered by Islamic banks adhere to Sharia principles through the evaluation of contract structures, transaction mechanisms, fund usage, and profit distribution mechanisms. With effective supervision from the SSB, it is expected that Islamic banking can continue to grow and gain public trust. This research contributes to the development of knowledge and practice in the field of Islamic banking.

The Influence of Digital Transformation on Customer Service, Employee Roles, and Regulatory Compliance in Branch Banking: Evidence from ICICI Bank, Vidarbha Region

The Influence of Digital Transformation on Customer Service, Employee Roles, and Regulatory Compliance in Branch Banking: Evidence from ICICI Bank, Vidarbha Region

The effect of external Shariah audit on the performance of Islamic banking: evidence from Bahrain and Oman

Purpose This paper aims to examine the effect of external Sharia audit on the performance of Islamic banks in Bahrain and Oman, which are countries that implement it. This study aims to explore the role of external Sharia audit in preventing prohibited profits and mitigating the risks of noncompliance with Sharia principles. Design/methodology/approach This paper opted a quantitative approach and collected data from the employees of the Sharia Supervision Board & Sharia Audit in the Islamic banks. This paper studied how external Sharia audit affects the financial profitability and compliance with Islamic Sharia principles of Islamic banks, using partial least squares structural equation modeling technique. Findings The results indicated that external Sharia audit had a significant positive effect on both financial profitability and compliance with Islamic Sharia principles in the Islamic banks under study. This means that external Sharia audit enhances the financial performance and the adherence to Islamic Sharia principles of the Islamic banks. Research limitations/implications This study has some limitations that suggest directions for future research, such as expanding the sample to other countries and measuring more performance indicators for Islamic banks. Practical implications This study suggests that external Sharia audit enhances the performance and compliance of Islamic banks and urges the regulators to adopt it and standardize it. Originality/value This study contributes to the literature on Islamic finance and external Sharia audit by providing empirical evidence on the impact of external Sharia audit on the performance of Islamic banks.

Enhancing Audit and Compliance in Branch Banking: The Impact of Digitization and Artificial Intelligence at ICICI Bank, Vidarbha

Enhancing Audit and Compliance in Branch Banking: The Impact of Digitization and Artificial Intelligence at ICICI Bank, Vidarbha

Factors Influencing Islamic Social Reporting in Indonesian Sharia Banking Compliance

Factors Influencing Islamic Social Reporting in Indonesian Sharia Banking Compliance

Theoretical insights into IT governance and compliance in banking: Perspectives from African and U.S. regulatory environments

This review paper provides a comprehensive comparative analysis of IT governance and compliance within the banking sectors of Africa and the U.S., highlighting the intricacies of navigating diverse regulatory environments. Through examining governance strategies, compliance mechanisms, and best practices, the paper underscores the adaptation of frameworks like COBIT, ISO/IEC 27001, and ITIL to meet regional regulatory demands and operational challenges. Key insights reveal significant differences in regulatory landscapes, technological maturity, and cybersecurity and risk management approaches. The analysis identifies best practices and lessons that can be leveraged globally, suggesting areas for future research including emerging technologies and the impact of global regulations. This work aims to enhance understanding of IT governance and compliance, offering valuable perspectives for banks, regulators, and policymakers. Keywords: IT Governance, Compliance, Banking Sector, Regulatory Environment, Cybersecurity, Emerging Technologies.

Perlindungan Hukum Bagi Nasabah dalam Perjanjian Kredit Bank terkait Risiko yang Timbul Akibat Pandemi Covid-19

In the era of modern economic life, banking institutions in Indonesia have a very crucial role in the national financial system. Services provided by the bank to the public are money transfer services, collection services, savings and loan services and others. The condition of the banking world in Indonesia has undergone many changes from time to time. This study aims to find out how to regulate legal protection for bank customers and how to form legal protection for customers in credit agreements related to risks arising from the covid-19 pandemic. This study uses a juridical-normative research method. The results of the study show that the regulation of legal protection for customers during the Covid-19 disaster is the Civil Code, Bank Indonesia Regulations, Consumer Protection Laws and Financial Services Authority Regulations. The implementation of legal protection for customers against the COVID-19 pandemic is quite good. This is indicated by the Bank's compliance with all forms of regulations made by regulators including the government. The conclusion from this research is that the policy and implementation of law enforcement in legal protection for customers in a state of the Covid-19 pandemic disaster is carried out quite well by the Bank. The suggestion from the author is that there should be more detailed regulations regarding customers when experiencing a disaster or pandemic and it is hoped that banking institutions carry out the mandate of the Financial Services Authority Regulation.

The Competency And Awareness Level Of Anti-Money Laundering & Counter Financing Terrorism Risk Judgment Amongst Malaysian Banking Compliance Officers

The Competency And Awareness Level Of Anti-Money Laundering & Counter Financing Terrorism Risk Judgment Amongst Malaysian Banking Compliance Officers

Revitalization Supervision Islamic Banking in Enhancement Compliance in Indonesia and Malaysia

This study is indicated with social reality that, following three decades of dual banking system implementation in Indonesia, Islamic banks' operational activities are essentially identical with the operations of conventional banks. The thing that distinguishes is only the Shariah "brand". In the vast zone of national banking industry, Islamic banks are still being the "followers" of conventional banks with approximately 6.65% market share. The focus of study is on the Islamic bank supervision system by DPS, the Shariah Bank Compliance Directorate, and OJK in carrying out supervisory functions related to fields of duty. The study methodology applied is a normative legal study which includes a study of norms, principles of sharia banking law, and the opinions of sharia economic law experts, while those used are a statutory approach and a sociological approach. The next stage of data analysis is data display, which illustrated through tables, figures, and graphs. Data categorization was carried out relied to the theme to identify the implementation of Islamic bank supervision duties in conforming to Shariah principles and the implementation of laws and regulations. The results showed that there are several problems in Islamic bank supervision institutions that make supervisory performance not optimal and pose potential legal risks for the bank. The roles of DPS, the Directorate of Shariah Bank Compliance, and OJK, which run independently and inefficiently, create overlapping aspects of Islamic bank supervision. This study recommends amending UURI No. 21 of 2008 about Shariah Banking by giving attributive responsibility to DPS to sanction Islamic banks that proved to violate Shariah principal compliance and establishing the OJK regulations on Islamic banking audit instruments.

Pengawasan Rutin oleh Praktisi Akuntansi terhadap Bank Berbasis Syariah

Sharia audit in Islamic banks aims to verify the compliance of these banks with Sharia principles and good governance. Sharia auditors need to have a comprehensive understanding of Sharia principles and relevant Sharia audit standards. They are required to collect sufficient and relevant evidence to support their audit conclusions, evaluate the collected evidence to ensure the compliance of Islamic banks with Sharia principles and good governance, and communicate the audit results to stakeholders. The implementation of Sharia audit standards in Islamic banks involves selecting adequate Sharia auditors, careful planning of Sharia audits, meticulous execution of Sharia audits, clear and transparent reporting of Sharia audit results, and effective follow-up on Sharia audit results. Competencies required by Sharia auditors include knowledge of Islamic law, fiqh muamalah, skills in accounting and auditing, and special characteristics as Sharia auditors.

Foreign Exchange Operations of Islami Bank Bangladesh Limited

In the dynamic global financial landscape, foreign exchange operations play a pivotal role in facilitating international trade and economic activities. Islami Bank Bangladesh Limited (IBBL) has emerged as a significant player in the country's banking sector with a strong commitment to Shariah-compliant practices. Understanding the nuances of its foreign exchange operations is essential for assessing its contribution to the national economy. This study aimed to comprehensively analyze the foreign exchange operations of Islami Bank Bangladesh Limited, focusing on its performance and adherence to Islamic principles. The research involved an in-depth examination of IBBL's foreign exchange operations, including documentary analysis, interviews with bank officials, and a review of relevant literature. Data on foreign exchange transactions, compliance with Shariah principles, and financial performance were analyzed. The study found that IBBL has demonstrated commendable performance in foreign exchange operations. It has successfully maintained a substantial share of the foreign exchange market in Bangladesh, accounting for over 20% of total transactions. Moreover, IBBL's strict adherence to Shariah principles in its foreign exchange activities has positioned it as a reputable Islamic banking institution. The bank's compliance rate with Islamic principles in foreign exchange dealings exceeded 90%, reflecting its commitment to ethical banking practices. Islami Bank Bangladesh Limited has emerged as a prominent player in the foreign exchange market, maintaining both financial viability and adherence to Shariah principles. Its commitment to ethical and Islamic banking practices has contributed significantly to the country's economic growth. IBBL should continue to focus on enhancing its foreign exchange operations, ensuring strict adherence to Islamic principles, and expanding its market presence.

Comparative analysis of accounting standards in the Islamic banking industry: a focus on financial leasing

Purpose This study aims to evaluate Islamic bank compliance with the accounting and auditing organisation for Islamic financial institutions (AAOIFI), assess the impact of multiple accounting standards in Islamic banking, examine the need for private accounting standards and assess international financial reporting standards (IFRS) compatibility with Islamic banking and analyse financial leasing accounting in Islamic banking compared to IFRS 16. Design/methodology/approach A combination of comparative theoretical analysis, physical examination, and semi-structured interviews has been used as a research methodology. These methods are interconnected and complement each other to provide a comprehensive approach to address the research questions. Findings Islamic banks in various countries show varying compliance with AAOIFI accounting standards. Some fully comply, while others adopt a hybrid approach combining AAOIFI and IFRS. Differences in accounting treatments can result in conflicts, asset inflation and financial statement discrepancies. Challenges and criticisms faced by AAOIFI standards include violating the matching principle and lacking faithful representation. Collaboration among academics, standards-setting bodies and organisers is crucial for guiding the reporting of Islamic financial statements. Practical implications The research identifies gaps in implementing Islamic accounting standards and proposes strategies to enhance compliance, improve performance and increase transparency in Islamic financial institutions. It highlights the importance of a harmonised and universally accepted accounting framework for Islamic banking, considering the compatibility between IFRS and Islamic principles. Social implications Social implications have arisen regarding the global acceptance of Islamic finance, which leads to an increase in socially Islamic finance exchange. Originality/value This research examines the consequences of using multiple accounting standards in the Islamic banking industry and discusses the need for private accounting standards and compatibility with IFRS.

Anti-Money Laundering Compliance and Financial Performance of Commercial Banks in South Sudan: A Survey of Literature on Internal Policies

Anti-Money Laundering Compliance and Financial Performance of Commercial Banks in South Sudan: A Survey of Literature on Internal Policies

A Survey of Literature on Suspicious Transaction Monitoring: Anti-Money Laundering Compliance and Financial Performance of Commercial Banks in South Sudan

A Survey of Literature on Suspicious Transaction Monitoring: Anti-Money Laundering Compliance and Financial Performance of Commercial Banks in South Sudan

Leveraging Data Analytics for Productivity and Compliance in Banking

In the modern banking world, data analytics have become a significant factor in making operational processes more efficient, more accurate in risk management, and more compliant with regulations. This paper examines the various aspects of data-driven banking decision-making and its role in productivity improvements and compliance. Data analytics solutions, which address specific challenges banks are experiencing, are further explained in this research, ultimately revealing the disruptive power of stepping up one's data activities. The results underline the importance of data analytics as a tool that may be used to improve or is required to process and detect risks and standards closely

The issue of economic and legal prerequisites for the emergence and development of compliance in the sphere of banking activities

The article examines the issue of prerequisites for the emergence and development of compliance, which is becoming increasingly widespread in the sphere of business in Ukraine. Compliance control is a necessary and mandatory element of the activities of Western companies, both financial and representatives of other areas of business. Compliance came to Ukraine relatively recently and has not become widespread in domestic business. The issue of compliance is relatively new not only for domestic financial science and law enforcement practice, but also for industries, agriculture, and medicine in the framework of control, prevention and prevention of risks associated with non­compliance with the requirements, rules, and regulations of the law. That is why in the field of ensuring banking security, it is necessary to comply with the requirements of the legislation regulating relations in the field of banking activity, with the aim of increasing the efficiency of operations, increasing competitiveness and investment attractiveness. Failure to comply with this requirement may cause irreversible consequences for the banking institution itself, for the state, as well as for investors, partners, shareholders and customers. Prevention of these negative consequences is the task of an effective banking compliance system as an element of Ukraine's economic security. For a better understanding of the meaning of the compliance procedure, in the article, the author singles out the economic and legal prerequisites for the emergence of compliance, its importance, development in Ukraine, and the consequences of applying this procedure. Recently, the banking system of Ukraine has been significantly affected by changes in economic conditions, namely military actions that caused a decrease in assets, created a large number of risks and threats for banking institutions. The current state of Ukrainian control over compliance with legislation in the compliance system in banking requires research and a critical analysis of its regulatory framework in Ukraine to determine effective directions for the development of legislation in this area. The author analyzed international compliance documents that define the principles of compliance, contain recommendations for building an effective compliance function, establish mechanisms for the implementation and functioning of the compliance control system, regulate issues of identification, assessment, management, and timely notification when compliance risks are identified.

Analysis of the Effect Spin-Off Increasing Shariah Compliance in Indonesian Islamic Bank

Sharia banks are committed to growing with the potential and sharia market. But sharia banks also want to be pure sharia everywhere. One way is by spin off, but it turned out to be stagnant and not in accordance with the percentage of the sharia market in Indonesia. Sharia bank efficiency does not grow rapidly and profits are minimal when spin off. The aim of this research is to analyze the impact of bank spin-offs on Sharia bank compliance. This research method uses a causative qualitative method, based on qualitative data looking at the cause and effect relationship of a policy. To strengthen the results, deep structured open interviews were used from policy makers (BI), academics and Islamic bank spin-off actors. The results show that Spin off is a necessity as mandated by Law No. 21 of 2008, because on the one hand it wants to be a goal for halal Islamic banks in a big way. The impact is that banks that have been spun off will increase their sharia compliance more than UUS, even though the growth is not very significant and their business is not very efficient.