Author information:
Andrea Pelei https://orcid.org/0009-0001-2318-2826: Budapest University of Technology and Economics, PhD Student. E-mail: andrea.pelei@yahoo.com
Ferenc Bognár https://orcid.org/0000-0003-1943-8742: Budapest University of Technology and Economics, Associate Professor. E-mail: bognar.ferenc@gtk.bme.hu
Petra Benedek https://orcid.org/0000-0001-6408-1856: Budapest University of Technology and Economics, Assistant Professor. E-mail: benedek.petra@gtk.bme.hu
Abstract:
Regulatory compliance, often perceived as a burden by organisations, offers untapped opportunities for business development. By adopting, implementing and improving relevant standards and good practices, companies can increase stakeholder confidence, improve organisational reputation and reduce the legal, financial, business and reputational risks arising from various non-compliances. Drawing on literature research, the paper shows that compliance with regulations typically fosters an internal organisational environment and culture where innovation, excellence and sustainable growth can be created. Complex compliance management activities can help identify market opportunities, stimulate product development and improve customer experience. Compliance and innovation are compatible approaches that support long-term success.
Cite as (APA):
Pelei, A., Bognár, F., & Benedek, P. (2024). Compliance as Business Development Potential in the Credit Institution Sector. Financial and Economic Review, 23(3), 171–192. https://doi.org/10.33893/FER.23.3.171
Column:
Essay
Journal of Economic Literature (JEL) codes:
G28, G32
Keywords:
compliance management, risk management, innovation, business development, credit institutions
References:
Ambrus, I. (2020): A compliance jelentése és alapkérdései (The meaning of compliance and its key issues). https://jogaszvilag.hu/cegvilag/a-compliance-jelentese-es-alapkerdesei/. Downloaded: 13 June 2024.
Ambrus, I. – Farkas, Á. (2019): Basic issues of compliance. Budapest, Wolters Kluwer Kiadó. https://doi.org/10.55413/9789632959344
Arellano-Gault, D. – Del Castillo, A. (2023): The Promises and Perils of Compliance: Organizational factors in the success (or failure) of compliance programs. Berlin, Boston: De Gruyter, 1 – 186. https://doi.org/10.1515/9783110749113
Benedek, P. (2014): A vállalati compliance értékelése (Assessing corporate compliance). Vezetéstudomány, 45(7–8): 29–39. https://doi.org/10.14267/VEZTUD.2014.07.03
Benedek, P. (2019a): Compliance menedzsment a szolgáltatási szektorban (Compliance management in services). PhD thesis, Budapest University of Technology and Economics, Faculty of Economics and Social Sciences, Doctoral School of Business and Management.
Benedek, P. (2019b): Compliance menedzsment a pénzügyi szolgáltatásokban (Compliance management in financial services). Munkaügyi Szemle, 62(4): 41–51.
Bognár, F. – Szentes, B. – Benedek, P. (2023): Compliance Risk Assessment in the Banking Sector: Application of a Novel Pairwise Comparison-based PRISM Method. Complexity, 2023, 9165815. https://doi.org/10.1155/2023/9165815
Braun, T. (2019): Compliance Norms in Financial Institutions: Measures, Case Studies and Best Practices. Palgrave Macmillan Cham. https://doi.org/10.1007/978-3-030-24966-3
Deloitte (2015): The changing role of compliance. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Financial-Services/gx-financial-changing-role-compliance.pdf. Downloaded: 18 March 2024.
Demeter, K. – Gelei, A. – Jenei, I. – Nagy, J. (2008): Tevékenységmenedzsment (Activity management). Aula Kiadó, Budapest.
Dénesné Orcsik, J. (2023): Compliance a pénzintézetek életében – elvárások és ajánlások (Compliance in the life of financial institutions – expectations and recommendations). Wolters Kluwer, 4 July. https://www.wolterskluwer.com/hu-hu/expert-insights/comliance-penzintezetek-eleteben Downloaded: 18 March 2024.
Doyle, E. – McGovern, D. – McCarthy S. (2014): Compliance–innovation: integrating quality and compliance knowledge and practice. Total Quality Management & Business Excellence, 25(9–10): 1156–1170. https://doi.org/10.1080/14783363.2014.914641
Esayas, S. – Mahler, T. (2015): Modelling compliance risk: a structured approach. Artificial Intelligence and Law, 23(3): 271–300. https://doi.org/10.1007/s10506-015-9174-x
Esayas, S. – Mahler, T. – Seehusen, F. – Bjørnstad, F. – Brubakk, V. (2015): An integrated method for compliance and risk assessment. 2015 IEEE Conference on Communications and Network Security (CNS), Florence, Italy, pp. 568–576. https://doi.org/10.1109/CNS.2015.7346870
Fogarasi, R. (2022): Pénzintézeti compliance – Egy kötelező tevékenység egyre diszfunkcionálisabb gyakorlása (Financial institution compliance – The increasingly dysfunctional exercise of a mandatory activity). Aliant (alianthungary.com), 12 January. https://alianthungary.com/penzintezeti-compliance-egy-kotelezo-tevekenyseg-egyre-diszfunkcionalisabb-gyakorlasa/. Downloaded: 6 June 2024.
Gerlach, J. – Stryker, N. – Matsuo, A. – Dookhie, R. (2017): Harnessing data and analytics to transform compliance. KPMG. https://www.canadianinstitute.com/wp-content/uploads/2017/10/KPMGharnessing-data-analytics-to-transform-compliance.pdf. Downloaded: 18 March 2024.
Grima, S. – Marano, P. (2021): Designing a Model for Testing the Effectiveness of a Regulation: The Case of DORA for Insurance Undertakings. Risks, 9(11), 206. https://doi.org/10.3390/risks9110206
Haelterman, H. (2022): Breaking Silos of Legal and Regulatory Risks to Outperform Traditional Compliance Approaches. European Journal on Criminal Policy and Research, 28: 19–36. https://doi.org/10.1007/s10610-020-09468-x
Homolya, D. (2012): A bankok által alkalmazott működési kockázatkezelési módszerek és az intézményméret viszonya (The relationship between banks’ operational risk management practices and institution size). Hitelintézeti Szemle, 11(2): 111–142. https://www.bankszovetseg.hu/Content/Hitelintezeti/homolya-daniel-111-142.pdf
IIA (2020): The IIA’s “Three Lines” model – An update of the Three Lines of Defense. Institute of Internal Auditors. https://www.theiia.org/globalassets/documents/resources/the-iias-three-lines-model-an-update-of-the-three-lines-of-defense-july-2020/three-lines-model-updated-english.pdf. Downloaded: 18 March 2024.
Imreh, S. (2005): Vállalkozásfejlesztés, mint a kis- és középvállalkozások hálózatosodásának ösztönzése (Enterprise development as a means of promoting networking among SMEs). PhD thesis. University of Szeged, Doctoral School in Economics. https://doktori.bibl.u-szeged.hu/id/eprint/490/3/de_3454.pdf. Downloaded: 6 June 2024.
Jacsó, J. (2019): A compliance fogalmáról és szerepéről a gazdasági életben (The concept and role of compliance in business). Miskolci Jogi Szemle, 14(Special Issue 1): 82–91.
Jacsó, J. (2020): Compliance-menedzsment szerepe és jelentősége a vállalatokon belül (The role and importance of compliance management within companies). Miskolci Jogi Szemle, 15(Special Issue 4): 72–82.
Jenei, T. (2016): Leggyakrabban használt kockázatkezelési modellek összehasonlítása (A comparison of the most commonly used risk management models). International Journal of Engineering and Management Sciences, 1(1), 22. https://doi.org/10.21791/IJEMS.2016.1.22
Kerényi, Á. – Müller, J. (2019): Brave New Digital World? – Financial Technology and the Power of Information. Financial and Economic Review, 18(1): 5–32. https://doi.org/10.33893/FER.18.1.532
Kocziszky, G. – Kardkovács, K. (2020): A compliance szerepe a közösségi értékek és érdekek védelmében – Elmélet és gyakorlat (The role of compliance in protecting community values and interests – Theory and practice). Akadémiai Kiadó. https://doi.org/10.1556/9789634545972
Liber, Á. (2009): A belső visszaélés-jelentési rendszer jogi követelményeiről I. rész (Legal requirements for an internal abuse reporting system Part I). Gazdaság és Jog, 2009/2: 11–16. https://szakcikkadatbazis.hu/doc/8717997. Downloaded: 6 June 2024.
Mishchenko, S. – Naumenkova, S. – Mishchenko, V. – Dorofeiev, D. (2021): Innovation risk management in financial institutions. Investment Management and Financial Innovations, 18(1): 190–202. https://doi.org/10.21511/imfi.18(1).2021.16
Móra, M. (2019): Ten years after the crisis: Thoughts on the reform of financial regulation. Economy and Finance, 6(4): 344–397. https://doi.org/10.33908/EF.2019.4.1
Novak, P.J. – Arnold, W.A. – Henningsgaard, B. – Hozalski, R.M. – Kessler, K. – LaPara, K.T.L.– Parrella, A. – Rogacki, L. – Thompson, C. – Thorson, R. – Zimmerman, R.A. – Bott, C.B. – Daigger, G.T. – Neethling, J.B. (2015): Innovation Promoted by Regulatory Flexibility. Environmental Science & Technology, 49(24): 13908–13909. https://doi.org/10.1021/acs.est.5b05394
Pavlidis, G. (2021): Europe in the digital age: regulating digital finance without suffocating innovation. Law, Innovation and Technology, 13(2): 464–477. https://doi.org/10.1080/17579961.2021.1977222
Stevens, R. – Dykstra, J. – Everette, W.K. – Mazurek, M.L. (2020): It Lurks Within: A Look at the Unexpected Security Implications of Compliance Programs. IEEE Security & Privacy, 18(6): 51–58. https://doi.org/10.1109/MSEC.2020.3014291
Teichmann, F.M.J. – Wittmann, C. (2024): Compliance cultures and the role of financial incentives. Journal of Financial Crime, 31(1): 226–232. https://doi.org/10.1108/JFC-06-2022-0135
Törcsváry, I. (2023): A vezetés szerepe a belső kontrollrendszer kialakításában (The role of management in the development of an internal control system). Acta Wekerleensis: Gazdaság és Társadalom, 2023(1): 35–49.
Van den Broek, T. – Van Veenstra, A.F. (2018): Governance of big data collaborations: How to balance regulatory compliance and disruptive innovation. Technological Forecasting and Social Change, 129: 330–338. https://doi.org/10.1016/j.techfore.2017.09.040