On 29 November 2017, the Dutch Central Bank (De Nederlandsche Bank, DNB) published an update on its investigations into the use and functioning of a systematic integrity risk analysis (SIRA) of banks in practice. According to DNB, an effective SIRA contributes to avoiding financial-economic crimes and forms the basis for sound business operations.
DNB currently investigates SIRAs for:
- banks, insurers and trust offices facing drastic organisational or strategical changes;
- the control of conflicts of interest for a selection of pension funds and health insurers; and
- assessing integrity risks when developing new products for a selection of banks.
According to DNB, it follows from previous investigations that putting the SIRA into practice does not always happen an adequate manner. Financial institutions are using DNB’s good practice on SIRAs, but they still do not sufficiently use the SIRA for the actual assessment and management of integrity risks. Consequently, the functioning of the policies around integrity within financial institutions could be compromised, leaving such institutions vulnerable to involvement in financial-economic crimes. The interim results of the ongoing investigations seem to confirm these earlier findings.
DNB indicates that it will inform the financial institutions concerned on its findings in the coming period. Some of the investigations are scheduled for the end of 2017, so feedback to the institutions concerned can be expected early 2018.
View DNB’s update on SIRAs (Dutch only), 29 November 2017.