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ABA’s risk management ‘world class’

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Torsten Kleine Buening is chief risk officer and compliance adviser to the CEO at ABA Bank. SUPPLIED

ABA’s risk management ‘world class’

What does it mean for customers that ABA Bank meets all the Kingdom’s regulations on the governance of banks and financial institutions?

Cambodian authorities, including the National Bank of Cambodia – NBC – as ABA’s supervisory authority, have established a comprehensive set of standards, regulations and instructions – matching the local economic needs and legal context.

Full adherence to local standards, regulations and instructions provides ABA’s customers with the comfort that the bank’s operations are safe, secure and rooted in the local, Cambodian context.

What international standards does ABA follow?

ABA implements various international standards – the objective is to provide ABA’s customers with confidence and trust that ABA protects its customers data and privacy, and at the same time provides convenient banking services.

A good example is the Payment Card Industry Data Security Standard. This is a set of security standards designed to ensure that all companies that accept, process, store or transmit payment card holder data provide a secure environment.

As a subsidiary of National Bank of Canada, ABA also implements, where and as applicable, Canadian best practices, ensuring ABA’s operations are on par with international peers.

While international standards provide a constant source of insight for ABA in adopting international best practices, it is imperative for ABA as Cambodian bank to be fully compliant with local standards, regulations and instructions – both in letter and in spirit.

ABA has retained its S&P credit rating of B+ with Stable outlook. What does this say about the bank sustainably managing its loan and deposit growth, and its growth trajectory?

The B+ rating as provided by S&P reflects ABA’s excellent performance and confirms ABA’s strong positions in the market. The rating is the result of the implementation of ABA’s sound business strategies, which benefit customers and shareholders.

ABA retained its B+ rating given its material and growing market share of loans and deposits with above average profitability.

The Stable outlook reflects the view that ABA will sustainably manage rapid loan and deposit growth, and will continue to report good asset quality despite the challenging context of the Covid-19 pandemic.

In what ways has ABA Bank instilled a compliance culture into its operations?

ABA considers a strong compliance culture as a benefit for its customers, protecting their interests. For ABA, a robust business must be built on strong ethics and operate with integrity.

Compliance – with local laws and regulators, and with our own best practice standards – is fundamental to what ABA is.

The bank continuously invests in helping its employees understand why compliance matters. We are also shaping ABA’s due diligence and compliance processes to foster that same understanding in stakeholders all along ABA’s value chain.

To nurture a culture of common values across ABA, we use cutting-edge technologies.

ABA fully supports and participates in the compliance training and certification programmes as provided by the Institute of Banking and Finance, and encouraged by the Association of Banks in Cambodia.

ABA Bank strictly follows anti-money laundering – AML – and fraud compliance. As a leading financial institution in the Kingdom, how is this helping to improve Cambodia’s reputation internationally?

ABA supports the recognition of KHR – the Cambodian riel – as national currency and its increased use, as promoted by the National Bank of Cambodia. Nonetheless, the local economy continues to depend on USD – the US dollar –especially for cross-border transactions related to exports and imports.

Strict enforcement of anti-money laundering/counter-terrorism financing requirements is consistent with the Royal Government of Cambodia’s objectives and ensures continued access to USD transactions with international partner banks.

How is ABA Bank using digital risk screening tools such as enterprise risk management (ERM) for robust risk intelligence to manage risks prudently?

ABA has implemented a host of world-class digital solutions – for compliance, risk and fraud – to manage risk in the most prudent manner possible and to adopt risk-based approaches.

Among others, these solutions are used to detect potentially fraudulent transactions, and by that help to protect ABA customers’ data and money. As part of these solutions, ABA deploys state-of-the-art ML and AI – machine learning and artificial intelligence – approaches to derive robust risk intelligence.

ABA’s toolbox also helps us manage risk in a prudent manner, keeping ABA’s customers’ and stakeholder’s interests protected and supporting the local economy given ABA’s role as a leading bank.

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