Since launching the construction of the all-sided compliance management system in November 2007, with the rearrangement of system as a breakthrough point and around the two aims of constructing a sound regulation system and building an information platform for compliance management, The Industrial Bank (IB) has rearranged and integrated its business procedures, actively building a basic platform for an overall compliance management system integrating operation, control and compliance management requirements at the same time.

In August 2008, based on accomplishing experimental units at the IB Head Office, Shanghai Branch and Chongqing Branch, the IB constructed and promoted the all-sided compliance management system across the bank with the principle of “overall planning, sectional advancement, rolling implementation, and focus on the actual effect”. By the end of November 2009, the IB has accomplished the promotion and construction of the all-sided compliance management system in the IB Head Office and 34 branches, and preliminarily built up the framework for the compliance management system in each branch, laying a solid foundation for the all-sided compliance management system. After accomplishing the roll-out of all-sided compliance management system, the IB initiated the construction for the updating and maintenance mechanism of the compliance management system, so as to guarantee the implementation and effective operation of the all-sided compliance management system across the entire bank.

In order to promote the effective implementation of the all-sided compliance management system and explore the best practices for compliance risk management, from March 2009, the IB selected the Shanghai Branch, Shenzhen Branch and Chongqing Branch as experimental units for monitoring compliance. Relying on the IT system platform of the all-sided compliance risk management, the experiment aimed to explore the normalized working mechanism for constructing compliance management and was focused on the following aspects: updating and maintenance management of external and internal regulations, collecting and continuously tracing compliance monitoring events, as well as timely identifying, collecting, and analyzing risks arising from the operation and management of branches, in addition to conducting risk assessments and reassessments at regular intervals, and gradually constructing the compliance management framework that takes inspection as basic point, and emphasizes risk assessment and process reengineering at the same time; and developing matrix compliance reports and building up a scientific reporting mechanism for compliance management, so as to continuously promote the coordination and ordered operation of the all-sided compliance management system.

October 2010, centered around further improving and optimizing the normalized working mechanism for compliance risk management, continuously upgrading the compliance management requirements for the connection between compliance management and business management, and highlighting the actual effect of compliance management, the IB will straighten out various businesses and management processes, deepening and refining the undertaking of the experimental units for compliance monitoring, and integrating current resources, in order to construct a unified, scientific information platform for compliance risk management and to specify the main track to implement and run the compliance system construction effectively and stably in next stage.

To be specific, with regard to experimental units for compliance monitoring, the IB recently added two new experimental branches – Jinan Branch and Xi’an Branch – based on the previous three experimental branches, so as to broaden the demonstration effect of the experimental undertaking. Meanwhile, the IB furthers strengthens, refines and actualizes all compliance management works: to establish a compliance risk database to provide data accumulation and support for branches to identify, monitor and give early warning on compliance risks; to explore and construct a key index system for compliance risk management, focusing on the discovery rates of self-examinations on risk incidents, satisfaction ratios on rectification, discovery time effect of problems, matrix distribution of compliance risks, distribution of design defect and execution flaws, as well as other aspects; to combine regular evaluation and focal evaluation, and carry out pertinent risk re-identification and re-evaluation. Moreover, with the standardization of various business inspections as a turning point, to probe and construct a compliance inspection working mechanism, enabling the full use of the compliance management capacities as the first and second lines of defense; to distinguish the focuses of compliance risk management and gradually improve the matrix report mechanism for compliance risks.