The document discusses the evolving landscape of compliance, particularly focusing on anti-money laundering (AML) obligations amid fragmented jurisdictional challenges. It emphasizes the importance of integrating compliance processes into business operations, fostering a culture of compliance awareness among employees, and adapting to new technologies and regulatory expectations. The text highlights the need for organizations to proactively address risks and enhance their compliance capabilities to navigate the complexities of modern financial regulations.

1. In FocusCompliance-Unit
Capacity Building
By:Mohammad IbrahimFheili

2. The Compliance Landscape

3. Compliance
Failure
Exclusion
Compliance
Compliance
Compliance
Choice Obligations
AML Compliance
“Due Diligence Convention” with anarrow
definition of Jurisdiction ...
Abundance of AMLRules with
blurred Jurisdictions ...
Failure
Exclusion
Failure
Exclusion
Failure
Exclusion
Ignorance Ambiguous Uncertain Risk-Based
WeDidnotinvestenoughinlearning...UntilwestartedtogetonewakeupcallafterAnother!

4. AML Compliance
Choice Obligations
Regulatory Obligations Legal Obligations

5. Mgmt. Committee
Risk Management
Board of Directors
Board Committees
Mgmt. Committee
Risk Management
Board of Directors
Board Committees
Mgmt. Committee
Risk Management
Board of Directors
Board Committees
Mgmt. Committee
Risk Management
Board of Directors
Board Committees
External AuditorExternal AuditorExternal Auditor
External Auditor
ProactiveRe-active/ProactiveRe-active?!
Re-active?!
Choice
 Accountability
Law Makers
Law Makers Law Makers Law Makers
Compliance Has fastEvolved Not By Choice. . .
AML Compliance UnitAML Compliance UnitAML Compliance Unit
Compliance Officer
Corporate ComplianceCorporate ComplianceCorporate Compliance
Corporate Compliance
Legal UnitLegal UnitLegal Unit
Legal Unit
 Skin InThe Game!
External & InternalExternal & InternalExternal Rules
External Guidelines
 Personal Liability

6.  Staff (Can Disrupt the compliance process . . .!)
 Business Unit
 Senior Management
 Board of Directors
ReportRiskEvents, Collect Data, Report,Etc.
Assess
Control
Oversight
Most Risks Start
Here
Every individual comes to the organization with his/her own
personal Perception of Risk.
Every Person comes to the Organization with his/her
own Inventory of Moral Values and these have a great
influenceover the decisions he/shemakes...
Escalatingtothe BoDWon’tMeanMuch!Because...

7. AML Compliance
Choice Obligations
Legal Obligations: where there is a legal obligation,
a jurisdiction must be adequately defined to the satisfaction
of the partiesin dispute.

8. TooMuch,Too Quickly,Too Detailed, TooDemanding,...
The Classic
Areas of
Anti Money
Laundering
Parachuted
into The
World of
Anti Money
Laundering

9. Scopeof
Compliance
Ill-Communicated
tothe firstlineof
defense

10. Jurisdiction“A”Tax Administration
Confidentiality andDataSafeguard
RequirementsinPlace.
Jurisdiction“B”TaxAdministration
Confidentiality andDataSafeguard
RequirementsinPlace.
Information Reporting
in relation to Tax
Residents of
jurisdiction “B”, in
accordance with
Jurisdiction “A”’s
domestic reporting
requirements.
Information Reporting
in relation to Tax
Residents of
jurisdiction “A”, in
accordance with
Jurisdiction “B”’s
domestic reporting
requirements.
IT Platform IT Platform
Jurisdiction“A”Financial
Institutions
Jurisdiction“B”Financial
Institutions
Information Exchange, in accordance with
the underlying legal instrument and the
Competent Authority Agreement between
Jurisdictions A & B
Jurisdiction “A” Jurisdiction “B”
Account Holders are Individuals & Entities
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Reportable
Accounts
Reportable
Accounts

11. CRS Participating
Countries
MonetaryAuthority
FinancialInstitutions
Fiscal Authority
OECD: CRSParticipatingTax Authority
C.R.S.Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
 Financial Institutions (FIs) in participating Jurisdictions are required
to report to own-Jurisdiction Tax Authority on Reportable Accounts.
 The Burden of proof of “Tax Residency” is on the Account Holder.
 Due Diligence is required by the FI. The Account Holder is
responsible to provide the FI accurate, updated and complete
information about his/her/its (Entities) Tax Residency.
 The FI is deemed Non-Compliant by its own Tax Authority! Or … ?
 Scope of CRS Reporting by FI: on any Account Holder who is a Tax
Resident in one (or more of the) CRS Participating Countries; except
its own – A Lebanese FI does not Report on strictly Lebanese Tax Payers under CRS.
 The Monetary Authorities, in the CRS participating countries, play no
party to all this!

12. MonetaryAuthority
FinancialInstitutions
Fiscal Authority
USFiscal Authority
 Financial Institutions (FIs) are required to report Directly to US
Tax Authority on Reportable Accounts.
 The Burden of proof is on the FI, and the FI is held accountable,
by US Tax Authority, for “Non-Compliance”.
 Due Diligence is required. The FI, in a non-US Jurisdiction, is
deemed Non-Compliant by the US Tax Authority.
 Scope: Any country where there can be a FATCA Reportable
Account.
 The Monetary and Fiscal Authorities, in “FATCA Participating
Countries”, play no party to all this!
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders

13. MonetaryAuthority
FinancialInstitutions
AsA Custodianof Personal Data
Fiscal Authority
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Account Holders
Although the European legislator repeatedly
refers to the concept of risks for the rights and
freedoms of the data subjects, the term risk is not
defined in the GDPR; only describes the adverse
effects of the infringement of the rights of natural
persons.

14. MAXIMIZE PROFIT subject to:
RISK , REGULATORY, Compliance,
Reporting, Etc. Constraints
RISK . . .
 Default
 Liquidity
 Maturity
 Others . . .
REGULATORY . . .
 Basel I
 Basel II
 Basel III
 Basel IV (In the making)
 Sanctions Rules
 USA_FATCA, OECD_CRS, EU_GDPR
Requirements
 AML, Etc. . . .
Uses of Funds Sources of Funds
 Reserves
 Loans
 Securities
 Other
Investments
 . . .
 All Types of
Deposits
 Borrowings
 Other
Sources
 Equity
 . . .
Off-Balance Sheet
Legal Issues . . .
BankingModel hasbeentransformedfromProfitDriventoCompliance
Driven...
WithMultiple
Jurisdictions!
With“Asset
Data” and
“Liability Data”

15. AreYouCompliant?
Compliance is not a Destination; it is a process that involves continuous
learningand improvement.
Don’t Just Abide By The Rule! Build Your Organizational Capacity to
secure:
 Process Efficiency &
 Process Effectiveness, and
 Organizational Readinessto cope...
Those who
claimedto be
“Compliant”
committed a
blunder!

16. You
See
The
Regulator
Sees
WouldYouBeSatisfied With 99.73%Accuracy InYourCompliance?
0.27%Tolerance ForMistakes!
99.73%accuracy translates into thefollowing:
 One hour of unsafe drinkingwater everymonth
 Two unsafe landingseverydayat Chicago O’HareAirport
 50 babiesdroppedat birth bydoctors everyday
 500 incorrect operations everyweek
 20,000incorrect drugprescriptionseveryyear
 22,000checksdeductedfromthe wrong bankaccount everyhour

17. Compliance is about identifying the risks that the
financial institution could encounter as a result of Failing
ToComply (be it intentional or byerror);
Conduct & Document comprehensive Risks Assessment;
and the planned remedial measures in a manner
appropriateto therequirements of the compliance rule!
Compliance is Not Just About Following The written
Rules!

18. For many employees, the Compliance function, like any second
line functional supportgroup,speaksadifferentlanguage:
Theterminology differences canbedifficult,
Theprocessesopaquetothe business,and
Thedocumentation requirements time-consuming.
How, then, can you get front-line employees to own the risks,
thereby improvingtheir abilitytomakebusinessdecisions?

19. OnGoingFollowup&
Service
 Opening Accounts
 Handling Objections,
andComplaints
 Cross-Selling
 Updating Customer
Profile (CIP),
 Etc….
• Customer Risk Scoring
• Customer Due Diligence
Risk
• Transaction Monitoring
Systems
• Cash Aggregation and
Reporting Systems,
• Etc…..
“Compliance Cycle”
must betainted with
the ‘ServiceCulture’.
AND“ServiceCycle”
must becontaminated
withthe ‘Compliance
Culture’.
BUTthetwo Cycles
MUSTBE separated,
buttheData
Consolidated, and the
Cycles Converge!
OnGoingMonitoring&
Compliance
Service Cycle
Compliance Cycle
“Service Cycle” must speak to the “Compliance Cycle” and identify possible sources of
failures (i.e.,risks)

20. First-Line Of Defense: Are You a “Hunter” or a “Farmer”?
Does This Question Bear Any Relevance To Risk-Taking Behavior?
• There Are Two Dimensions To Every Service Offered: Benefits & Features.
• Normally, You Sell the “Benefits”, and You Contract on the “Features”.
WhoIsTheHunter?
WhoIsTheFarmer?
• Great at Handling Objections.
• Most Likely to stretch the Truth.
• They Dwell on the Benefits
• They are pretty comfortable with
risk-taking behaviour.
• Great at Dealing with Customer
Complaints.
• Can’t promise more than they can
effectively deliver.
• They are normally intimately familiar
with the Features.
• They have the tendency to be risk-
averse individuals.

21. GetTheFirst Line ToOwnTheseEffort
• Building a successful Compliance program isn't just about implementing a
robust Compliance system or advanced analytics. It's about enabling a
cultural shift by embedding a pervasive sense of Compliance awareness and
ownershipatevery levelof theenterprise.
• Every time an employee engages in a transaction or makes a decision, he or
sheneeds toknow:
• Willthishurtor helpthebusiness?
• Will it get the financial institution in trouble or will it strengthen business
performance?
• Employee understanding of the balance between risks (i,.e., failure to
comply) andrewardsiscriticaltosuccess.

22. Focus on the “Why” of Compliance!
• Employees need to understand why obligations matter; they may not see the value of it in
the performanceof theirday-to-day jobs.
• The more complex an organization is, the more essential it is to be able to translate its
corevalues into clear behavioral terms, and expectations for all employees.
• Simply focusing on compliance may help employees learn the rules, focusing on values
willhelpassure that theyalso know what to dowhenthereisn’t arulefor something!
• Focus on building a culture that will drive collaboration to manage risks and meet
obligations.
• Compliance requires being aware, thorough planning, and effective communication at all
levelsof anorganization.
• Today’s employees deserve to know why compliance initiatives matter; they want and
needto feelliketheir contributions count!

23. Bring ComplianceAwarenessToTheFrontLine
• Communicate the Business Value of the Compliance Program. It helps to use positive language
alignedwithbusinessgrowthandsuccess.
• Keep it Simple. Compliance terminologies and concepts aren't always easy to grasp. For instance,
an issue, an incident and a risk may mean different things to a Compliance Officer – but to the
firstline,theyoftenlook thesame.Trainingcanhelpclosetheseknowledgegaps.
• Provide Support. Front-line employees need to know that the second line of defense exists not to
police their every move anddecision, but to provide independentoversight andto support them in
becomingbetterComplianceresponsibles.
• Incentivize. One of the best ways to drive Compliance awareness into the first line is to provide
incentives. For instance, policy compliance and loss avoidance behaviour can be linked to
rewardsandrecognitionprograms.
• Embed Analytics in the Backend. Once the first line starts playing a more active role in
Compliance,thenextstepistomakesenseof theirinputs.

24. Participative Compliance
Full and Consistent Communication &
Coordination with all Business Units
Autocratic Compliance
I Know what to do, and I will do it all
alone. Myway orthe highway!
Effective Compliance is everybody’s business . . .

25. Forces @ Work
Reshaping The Practice of Compliance
“The MiXed Dynamics”
1, 2, 3, 4, 5, 6, 7, 8, 9

26. 01.TheMiXed Dynamics
Compliance is a Fluid Industry!
• As if the “Compliance Universe” is trying to mimic the Complexity of the “Banking
Universe”! ...Workforce Complexity istheNew Normal!
• FATCA, CRS, GDPR, (what’s next?) have been globally rolled-out. Each Jurisdiction has
auniqueapproach tothem yet globalparameters.
• Organizations need to understand the nuances of classification under compliance
rules, and then based on the outcomes find the best way to collect, compile, review,
validate and communicate therequiredinformation toeachstakeholder.
…You have no choice BUTTOADAPTTOTHESPEED OFTHESE INITIATIVES.

27. Turnaround Time Expectations of Compliance Teams Are
Higher Than Ever!
• The old days when compliance teams could take two days to respond
to a request for information are over. …when the Board wants an
update, theyneedsanswersin seconds!
• Each Jurisdiction hasitsownrulesandformats.
• Banks with International presence might have dozens of different sets
ofrulestotackleinthe courseofcompliance!
02.The MiXed Dynamics

28. Fragmentation of Advisory Services . . .
• The Compliance Landscape is flooded with a colorful mix
of service providers, including accountants, boutique
firms,lawyers,andniche specialists.
• ImagineWorking AcrossMultiple Jurisdictions!
03.TheMiXed Dynamics

29. Resources Are Stretched . . .
• Compliance was often at the end of the queue for capital
andheadcount.
• Although this is rapidly changing, when budgets tighten,
complianceisoneof thefirsttobesqueezed.
• This Exerts YetMore(andundue)PressureOnPerformance!
04.The MiXed Dynamics

30. New Technology (Workflow Automation, AI Driven
Monitoring, and Big Data Analytics) Are Here . . .
• Compliance teams areengaged in DigitalTransformation,
but the laws have not been catching up with the speed of
technology, forcing compliance to adapt while remaining
in a pending situation of status quo until the regulators
catch enough speed.
05.The MiXed Dynamics
DescriptiveAnalytics DiagnosticsAnalytics PredictiveAnalytics PrescriptiveAnalytics

31. Risks (Intentional&
Unintentional)
Known toThe
Financial
Institution...With
continuous efforts
toIdentifymore
Non-Identifiable Risk
Non-IdentifiableRisk
WhatisNormally UsedinRisk
Identification:
• Client InformationProfile
• DueDiligence(DD)
• EnhancedDD
• Complete andUp-To-Date
Client File,
• Client Visits.
• ProperFollow Up
• Comprehensive&
ConsistentDataabout the
Market
• Etc.
Identified&
Identifiable Risks
• Expected Losses are
normally controlled or
metusingGross Income,
• While Unexpected Losses
require Capital.
Transform Your Compliance From Reactive To Proactive, and
Value-CreationDrivenUnit...YouHaveTheTools!
The more Data you collect, the much more Risks will be identified, the
better Understanding you willhave!

32. Increasing OurUnderstanding of Potential Outcomes (i.e.,
Impact)
IncreasingEvidenceonProbabilityof
occurrence(i.e.,Probability)
Ambiguity
Uncertainty
Ignorance
The Right Data Helps You Avoid Ambiguity, Ignorance, Uncertainty and Move in the
Directionof Effective RiskManagement ...
Effective Risk
Management

33. Tax Authorities Have Been Getting Much Tougher!
• The words “fraud,” “Evasion,” and “Criminal Intents” have
been what Compliance Units have to face with every day
whensearching,documenting, reviewing, rejecting, etc.
• But as well when explaining to the Boards the increase in
compliance driven processes to combat, in form and in
substance,anytaxevasion.
06. TheMiXed Dynamics

34. There Are Rising Demands From Third-Parties!
• The press has been increasingly interested in compliance
stories!
• Investors watch as well. Investors will steer clear of error-
strewn companies affecting at times share price value and
thus diminishedcapital-raisingpowers.
07.TheMiXedDynamics

35. Transformation Of The Compliance Function!
• Compliance is no longer a Backroom operation; it’s been surely moving toward “Value
Creation”!
• Compliance issurelymoving toward the leadrolewithin organizations.
• This will require a change of focus in terms of skill sets, with an emphasis on
managerial and technical skills.
• The ability to stay up-to-date, with the kind of regulatory issues that are required to
ensure compliance, is demanding too much of existing resources and it is challenging
toachieve cost efficiencies.
08. TheMiXed Dynamics

36. Taxing The Digital Economy!
• Unlike traditional companies, whose profits are taxed at value creation, digital
technology companies conduct most transactions electronically. This makes it
challengingto capturewherevalue iscreated, what itis,and how to measureit.
• Digitally-Driven companies operate virtually all over the world; their profits, however,
aretaxed only inthe jurisdiction wheretheyhave physical presence.
• How Digitally-Driven Financial Institutions, that only exist in virtual reality, can be
deemedFATCA, CRS and/or GDPRCompliant; ... Andbywhom?!
• Is it possible to migrate FATCA and/or CRS Reportable Accounts to Digital Banking to
evade(oravoid) tax implications?!
09. TheMiXed Dynamics

38. PRIMARY SECONDARY
• Employee Fraud/ Malice (Criminal)
• Payment/ settlement/delivery risk
• Technology investmentrisk
• Legal/Regulatory Risk /Public Liability
• Unauthorized activity / Employee misdeed (Willful)
• Employment Law
• Workforce disruption
• Loss or lackof key personnel
• Documentation orcontract risk
• Valuation /Pricing
• Internal/ Externalreporting andcompliance
• Project risk /Change management
• SellingRisks
• Systemdevelopment andimplementation
• Systemsfailures
• Systemssecurity breach
• Systemscapacity
• Criminal Activities
• Out-sourcing /Supplier Risk
• In-sourcingRisks
• Disaster andInfrastructuralutilities Failures
• Political andGovernment Risks
PEOPLE
PROCESSES
SYSTEMS
EXTERNAL
Andgoto
theroot-
causeof
these
possible
sourcesof
failures.

39. 01.Inspect This!
Count the Number of Times the Letter “f” Appears in all of
the Words Before You. Finished Files Are the Result of Years
of Scientific StudyCombined WithYearsof Experience!
If You Rely on Inspection Alone, There Is No
Guarantee That You Will Get The Quality You
Desire,andImprove Performance!10
Let’s PlayALittle ...

40. 02.Inspect This!
Count the Number of Times the Letter “F” Appears in all of
the Words Before You. Finished Files Are the Result of Years
of Scientific StudyCombined WithYearsof Experience!
If You Rely on Inspection Alone, There Is No
Guarantee That You Will Get The Quality You
Desire,andImprove Performance!10
Let’s PlayALittle ...

41. 03.Inspect This!
Count the Number of Times the Letter “f” Appears in all of
theWordsBefore You.
Finished Files Are the Result of Years of Scientific Study
CombinedWith Yearsof Experience!
If You Rely on Inspection Alone, There Is No
Guarantee That You Will Get The Quality You
Desire,andImprove Performance!10
Let’s PlayALittle ...

42. 1
3
You were asked by
a Zoo Keeper to
pick One animal to
take care of, for a
day, inside a 25m2
room; and alone?
Feel free:
 To ask any
question. I’m
the Animal
Keeper!
 To do what you
deem necessary
to succeed.
2
4
PretendTheseAre4DifferentTypesofClients!

43. Other Forces & Dynamics Reshaping Compliance

44. What’s driving today’s companies deeper and deeper into territories
thatmostCEOs findfrighteninglyunfamiliar!.
TheCustomers
TheCompetition
Coping WithChange
TakingCharge
Intensifying
Not-Optional
Risks
Regulations
Changing
Exponentially Increasing
AllRequireAttention ToDetails!
Performance
All Must
Converge
TechnologicalInnovationsExploding

45. It’sTimeYouSTOP“ComplianceByThe
Piece”,andFocusonBuildingYour
OrganizationalCapacity
LookForTheAdded-ValueInCompliance!
Organizational(ComplianceUnit)CapacityEssentials

46. Acknowledge theDimensions ofYourJob:Manage BothProcesses&People,and
DevelopDistinctiveOrganizational Capabilities.
ProcessResponsibilities include:
• Compliance UnitWorkPlanning
• Budgeting
• Scheduling
• Task/Work Assignment
• Identification of KPI,KRI,and KCI
• WorkImplementation &ProblemSolving
• Monitoring WorkProgress
• Evaluating &ReportingResults
PeopleResponsibilities include:
• Developing work team and individual
employeeskills &capabilities
• Motivating employees
• Coaching Employees
• Monitoring and providing feedback on day-
to-day performance
• Conducting formal performance reviews
• Developcompetentsuccessors
• Carrying out disciplinary activity
 KPI:KeyPerformanceIndicators
 KRI:KeyRiskIndicators
 KCI:KeyControl Indicators

47. Culture(e.g., Ethics, Values,...)
OperationalCapacity(e.g., The capacity toget the
job done. ..)
Performance(e.g., Contribution
to thebottom line. .. )
ExternalRelationsand
Perception(e.g.,Goodwill, .. .)
Functions (e.g.,Segregation of duties &
responsibilities . ..)
00.Organizational(ComplianceUnit)CapacityEssentials

48. CULTURE
Vision/
Mission
Values /
Beliefs
Rewards /
Incentives
The sum total of values, beliefs,
customs, traditions and meanings
developed over years that make the
organization unique, governs its
character anddrives itforward.
01.WhatMakesAnOrganization(Compliance Unit)Strong?

49. OPERATIONAL
CAPACITY
Governance
Leadership/
Management
Strategy
Financial
Management
Human Resources
Management Program /
Project
Management
Communication
Infrastructure
What is needed for the
organization to put its programs,
projects and activities in
operation.
02.WhatMakesAnOrganization(Compliance Unit)Strong?

50. PERFORMANCE
Effectiveness
Efficiency Relevance
FinancialHealth
What is needed for the
organization to meet its goals
and objectives and to become
viable.
03.WhatMakesAnOrganization(Compliance Unit)Strong?

51. EXTERNAL
RELATIONS AND
PERCEPTION
Rules and
norms
Legaland
political
framework
Linkages
and
networks
Ownership and
participation
The environment (political, social,
economic) in which the organization
functions; how the organization is
perceivedbyothers.
04.WhatMakesAnOrganization(Compliance Unit)Strong?

52. FUNCTIONS
Value-Generating
services
Promotion of
quality/standard
ofservice
Advancing
professional
practice
e.g.,Influencing the
practice and
Compliance policy
The reasons for which the
organization exists!
05.WhatMakesAnOrganization(Compliance Unit)Strong?

53. Capacity
Assessment
Data
Analysis
Improvement
plan
Implementation
and Performance
Measurement
Pre-cycle Validation, Evaluation.
Feedback
Descriptive
Diagnostic
Predictive
Prescriptive
06.WhatMakesAnOrganization(Compliance Unit)Strong?

54. 07.WhatGivesYourComplianceUnitTheEdge?
People
Values
Managers
Jobs

55. Organizational
Resources
• Financialassets
• Physicalassets
• Human resources
• Intangibleassets
• Structural-culturalassets
Organizational
Capabilities
• Organizationalprocessesandroutines
• Accumulatedknowledge
• Actualworkactivities
Core
Competencies
Distinctive Organizational
Capabilities
Value-Creation Advantage
Performance Results
08.WhatGivesYourComplianceUnitTheEdge?

56. Step 1
Step 2
Step 3
Step 4
Step 5
GatherUp TheCompliance Unit Profile;the“as is”.
Identify Sources Of Advantage & Disadvantage In The Core
BusinessOf YourCompliance Unit.
Describe All The Capabilities & Competencies Of Your
Compliance Unit.
Sort & Rank The Core Capabilities & Competencies
According ToStrategicImportance.
Identify And Agree On The Key Capabilities &
Competencies.
08.HowToGiveYourComplianceUnitDistinctiveCapabilities

57. FocusonQuality Decisions;
notoutcomes whilebeing
resultoriented!
Itis allin yourhands...YOU
DECIDE
09.HowToGiveYourComplianceUnitDistinctiveCapabilities

58. Productive Engagement
ResourcesDeployed
IF THERE is a clear signal on the part of the firm to continue on serving the client, more
datawill be collected andprocessed to identify, measureandmanageRisks (i.e.,Comply).
Due
Diligence
Enhanced Due
Diligence
Risk-Based
Approach
Enhancing Organizational Capacities…
Cost
SkillsNeeds
Know-How
Analytics
Collect, Store, andProcess Data ToImprove YourDecision-MakingCapacity!
This is the Value-Creation
Process in the course of
performing and demonstrating
Compliance!
Client
Information
Profile
De-
Risking
10.HowToGiveYourComplianceUnitDistinctiveCapabilities

59. ItIsAboutCreatingValue!
 The notion of creating value for [Internal] customers [Sale] is critical to
understanding customer needs and expectations and setting the right
objectivesfor businessactivities.
 Value depends on the full range of support services the customer experiences
in “conducting the business”: Speed & Accuracy in Account-Opening
Procedures;ClarityinRequired ComplianceForms,etc.

60. AnalysingTheProcessMap...
• HowmanySteps,Duplications,andHand-Offsinyourprocess?...
Causesofdisruptions,complexityandpossibledelays.
• Whatis theapproximatetimespent“IN”and“BETWEEN”eachStep?...
TheProcessCycle-Time.
• Wherearepossible Delays?...Why?
• WherearemajorBottlenecks?...Why?
• Howmanystepsdonotaddvalueforclients?...Aretheynecessary
(i.e.,Controls)?
• Wherearepossible problemsforclientsandstaff? ...AreThey
Material?AreTheyAddressable?

61. From TheComfort
Of Home
Walk-InThe
Branch
Actually Purchased
TheProduct
After Sales
Service
Start Start Cycle Ended To∞(Cycle NeverEnds)
How YouWantToGoAbout Creating Value?
A. Engaging ClientsWithYourBank.
B. SellingClientsYour Bank’s Products &Services
Compliance &SellingCycle

62. The Process!

63. Controls
InternalCompliance
Rule:Bank’sPolicies &
Procedures
ExternalCompliance
Rule:Regulatory
Guidelines
Processes
ProcessesTransform
InputsIntoOutputs!
Sub-Process
Sub-Process
Sub-Process
Sub-Process
Sub-Process
Whoputswork on
you desk?
Whenworkleaves your desk,
wheredoes it go?!
Inputs
Output
The Recipient of the Output
is your Customer!
Resources
Staff,Physical, Financial, Others

64. ManagementProcesses
 Strategic Direction
 Business Planning
 Performance Measurement& Review
CoreProcesses
Customer, Management,
Regulatory Authority
Requirements
Compliance (internal&
external)
Direction &
Resources
Performance
Requirements
Support
Support Processes
 People Management
 SystemManagement
 Administration
 Financial Management

65. InitialPhase:Setting Up
(allow forhours)
MaterialsNeeded: Flip
Chart,Markers, etc
Map AlternativePaths
Use Map ToImprove Process
More WaysTo Improve …
Map ThePrimary Process
Right TeamForProcess
Yes
No
Do Over
Intermediate Phase:
Mapping(allow for hours)
MaterialsNeeded: Flip
Chart,Markers, etc.
Advanced & Final
PhaseandBeyond:
Improving
SelectTeam
SelectAProcess
Define The Process
IntroduceControl Points
List All the activities, and put them in
a logical sequence, . . . Make sure
every member of the Team is in on
this. . . . Then, Drop them on a Process
Map.
This becomes possible after you have
identified process risks, assessed
theirimpacts, risk-ranked them,....
It could be a part of a Business
Continuity Plan(BCP),...

66. LookforBatching
CSR seesCustomers individually
Requestssentinbatches
toAML Units Resultsreturn
inbatches!

67. Categoriesof Waste:You Need ToSize TheSignificance Of YourWaste!
Transport Moving “stuff”
Injuries Damage to people
Motion Unnecessary human movement
Inventory “Stuff” waiting to be done
Waiting People waiting for “stuff” to arrive
Over processing “Stuff” we have to do but doesn’t add value
Over production Producing too much “stuff”
Defects “Stuff” that’s not right and needs fixing
Staff Untapped potential

68. Cross-Check Objectives with Processes (Use a Matrix). Rate
Each process in terms of its contribution to each business
objectives.
Processes
BusinessObjectives
MATRIXLike it or not, there are non-value
added activities that we often engage
in!
Who is in a position to decide if an
activity addsvalueornot?

69. Control is an ongoing process of
data collection, data analysis,
andcorrective actions.
IsTheProcess
InControl
Corrective
Actions
YES
N0
Collect Data
Diagnosis to get to the root
cause of the problem

70. ProcessVariation
Natural
Variations
Natural Limits
TotalVariations OfThe Process
Un-Natural
Variations
Process Capability Study: Discover And
EliminateCausesOfUn-Natural Variations.
 Natural Variations: Anticipated
Variations
 Un-Natural Variations: Unanticipated
Variations .

71. MapGeneration–AnExample:RequestforPayment
• Unit Level(process request,PrepareAccountOpeningForms, etc.)
• Task Level (complete CIF, KYC, verify data, send forms for approval,
etc.)
• Action Level (information needed for the account opening, approval
authority,method tosendrequest)

73. “Over 30 years of Experience in Banking.
mifheili@gmail.com (961) 3 337175
Mohammad Ibrahim Fheili
He is currently serving as:
 Risk, Capacity Building And Organizational Transformation
Specialists.
 Trainer in Risk & Compliance
 University Lecturer: Economics, Risk, and Banking Operations
Served as:
 An Executive (AGM) at JTB Bank in Lebanon.
 Senior Manager & Chief Risk Officer at Group Fransabank
 Senior Manager at BankMed
 An Economist at the Association of Banks in Lebanon
 Mohammad received his college education (undergraduate &
graduate) at Louisiana State University (LSU), and has been
teaching Economics and Finance for over 25 continuous years at
reputable universities in the USA (LSU) and Lebanon (LAU).
 Finally, Mohammad published over 25 articles, of those many are in
refereed Journals (e.g., Journal of Money Laundering & Control;
Journal of Operational Risk; Journal of Law & Economics; etc.) and
Bulletins.”