The effectiveness of the regulatory compliance monitoring process for banks in South Africa

Abstract

The primary objective of this study is to investigate the effectiveness of the regulatory compliance framework for banks in South Africa. South African Reserve Bank (SARB) fined the major banks as the result of their weaknesses on their compliance monitoring that is not effective. The regulatory compliance problem faced by South African banks, is that banks experience difficulties in both managing regulatory compliance process. The problem being explored in the study is that the regulatory compliance framework and its monitoring process might not be effective. A quantitative research methodology was used. A questionnaire was designed based on a five-point lickert scale rating. This was used to collect data from 119 respondents within the two banks. The findings sug-gest that the respondents are aware that compliance framework exist in their banks. The results indicate that the introduction of regulatory compliance framework in the banking sector is effective and data clearly illustrates that the respondents appear to understand factors causing non-compliance with regulatory requirements. The respond-ents view regulatory compliance framework as instrumental to the resilient, stable and designed to adhere to regulatory compliance requirements. The banks should imple-ment effective programs to monitor non-compliance with regulatory obligations. Compli-ance regulatory prospects continues to increase, with the challenge to effectively imple-ment a regulatory program that is a practical component of the bank management risk principles to be embedded in the financial institutions. Compliance risk management must be co-ordinated carefully to banks personnel to enhance dedication and ability to manage multiple risk types while complying with existing regulations.