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Compliance Risk and Diligence

Compliance Risk and Diligence

Risk Management Advisory

Singapore is becoming a leading financial hub globally as it takes on safe financial management operations for excellent performance. The credit for these huge and admirable achievements and thanks to one of the best frameworks worldwide in the country, regulated by MAS

What is Risk Management Framework?

A Risk Management Framework (RMF) is necessary for all FIs to report all kinds of business risks to MAS. RMF is mandatory for all kinds of FMCs to report MAS about various kinds of risk and risk mitigations. RMF is required as FIs deal with large amounts of money daily; that’s why this is a very critical area where all FIs should be careful as they are conducting this business activity. Also, RFM may be addressed in the risk management section under regulatory compliance.

As the name suggests, Risk Management Framework (RMF) is responsible for the coverage and documentation of all business risks. It is popular among financial companies. Why is that? These institutions deal with huge amounts of money; hence it is a crucial area that every company must take care of as they run their business. You can address the risk management sector under the compliance program.

What refers to Risk Management Metrics? 

The step in risk management is risk assessment which will help you obtain a Risk Management compliance document. What follows are the risk management metrics, also popularly known as the indicators. What are Risk Management metrics? It is a table that highlights the seriousness of every risk that may face your financial institution. This document gives you an insight into what to expect when dealing with certain risks and how much effect they may have on your business.

What is a compliance Policy?

Your compliance program is only attainable after preparing the RMF and the RMM since it must refer to the two documents. Ensure that it matches the RMF and the risks brought to the table. Note that every Singapore-based license requires you to have a compliance policy.

Explaining, in Brief, the Following Subheadings on Risk Management :

External Controls

External controls in risk management are the measures put in place by the company to secure the functioning of the company from risks that may affect its functioning. 
External controls include the following points:

  • Risk assessment 
  • Contingency planning 
  • Insurance coverage 
  • Compliance
  • Monitoring external factors that may impact the company’s risk profile

Business Process 

Business process in risk management is a well-planned approach company uses to recognize, evaluate, relieve, and monitor risks that may impact the company’s functioning. It includes various activities pointing at helping the company to manage risks successfully and skillfully.


The meaning of compliance is the company’s devotion to regulations, laws, and standards relevant to its functioning. Compliance assists the company in conducting its business legally and ethically to reduce the risk of penalties, fines, and other legal outcomes. It helps to recognize and control risks through regular assessment and audit of the company’s business activities and procedures.

Internal Audit

Internal audit is an activity within the company that gives independent and purpose assurance to upgrade the company’s activities. Internal auditors assess the productiveness of the company’s risk management procedures and make advice for enhancement. Internal auditors supply helpful guidance to senior management on the improvement of risk management practices across the company.

Conflict of Interest

A conflict of interest is a situation whereby an individual or company has competing interests that may interfere with their ability to act impartially or in the best interests of their stakeholders. Conflicts of interest can create risks by impairing objectivity, leading to biased decisions or actions, or compromising integrity. An example is where an employee has personal or financial interests that conflict with their professional duties, or where an organization has business relationships that may affect their decision-making.

A conflict of interest is a circumstance whereby the company or any individual has engaged that may interfere with their potential to act unbiasedly or in the best interest of their stakeholder. Conflict of interest could generate risks by impartiality, directing to biased conclusions or actions; for e.g., the employee has her / his financial interest or any personal interest that creates conflict with their professional responsibilities and duties, or the company has business relationships that can affect their deciding.

Business Continuity Management (BCM)

BCM is the company’s potential to continue or quickly restart critical business functions immediately after disruption, such as follows:

  • Natural disaster
  • Cyber attack
  • And another unexpected incident.

BCM is necessary to identify possible risks and upgrade the plan of action to reduce the impact on the company’s functioning

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