June 2 2016
China’s biggest banks are beefing up their risk management and compliance programmes, following a series of high-profile judicial investigations and regulatory probes in the US and Europe. The legal and regulatory headaches are likely to be a drag on their aggressive overseas expansion until suitable anti-money-laundering and know-your-customer controls are in place, bankers say, but they are taking action.
A survey by LexisNexis Risk Solutions, which provides compliance services to Chinese banks, showed that half expect to increase their compliance budgets by 20% or more this year, and the rest will raise it by a lesser amount. “Chinese banks are going through a learning curve,” said Ellen Zimiles, the global head of investigations and compliance at Navigant Consulting.
“They’re going to have to come up to standards if they’re going to have branches in the US and Europe.”