24 •
The Lion King
• July - September 2017
Growing the Seed
Were there specific inspirational
moments that made you realise you
were on the right career path?
No, not really. I always worked in con-
trol environments in Citi and joined
the Internal Audit department of Fuji
International Finance (now Mizuho)
when I left Citi. I deepened my
emphasis on control by becoming
their Internal Auditor.
At that time the market was largely
self-regulated. Internal Audit was the
area that worked closely with the
various trade associations and regula-
tors such as: Securities and Investment
Board, The Securities Association,
Investment Management Regulatory
Organisation, and others. These
organisations, through many structural
changes went on to became the
Prudential Regulation Authority (PRA)
and Financial Conduct Authority
(FCA), which regulate us here in the
UK today.
Is compliance a business enabling
tool?
The commonly held view that
Compliance is a necessary evil is, I
believe, entirely wrong. Whilst a good
Compliance team is not cheap there
is no reason why it shouldn’t add value
to the business. A better way to view
Compliance is to consider the oppor-
tunity cost of a weak or non-existent
Compliance function. The regulators
regularly fine firms whose compliance
is weak and these fines, the associat-
ed reputational damage, the cost of
investigations and corrective actions,
can easily amount to huge expens-
es both in cash and brand damage
terms.
I also believe that Compliance is a
missed opportunity as far as business
generation is concerned. Given the
choice between a well governed
compliant bank and a poorly gov-
erned bank which bank would attract
the better business? We need to get
that message across at every oppor-
tunity.
Which government agencies regulate
the practice of Compliance in the UK?
There are two main regulators. The
PRA which regulates from a prudential
perspective and the FCA who are
all about the customer and conduct
issues. The FCA’s remit includes finan-
cial crime.
How effective are they in tackling
Money Laundering and Terrorist
Financing?
As far as effectiveness is concerned
there is no doubt that the UK is highly
regulated, especially from an AML
(Anti Money Laundering) and TF
(Terrorist Funding) perspective. The
FCA place great importance on hav-
ing the appropriate controls in place
to counter financial crime and they
are keen to publicly reprimand and
fine firms that fail their tests. However,
whether that means they are effec-
tive, I’ll let others judge.
How is the practice of Compliance
regulated in the UK?
The FCA require firms to appoint
Senior Managers in the Compliance
Oversight function (SMF16) and the
Money Laundering Reporting function
(SMF17). Following an evaluation of
the prospect’s fitness and propriety
by the firm, candidates are proposed
to the regulator who will approve
them if suitable and add them to the
register of authorised individuals. From
that point on those individuals are
held personally accountable for those
functions by the regulators.
The regulators have an extensive
“toolkit” of measures at their disposal
to deal with regulatory misdemean-
ours. These range from informal low
level advice for minor issues, through
to fines, barring from the business,
and ultimately jail if they bring a suc-
cessful prosecution on a criminal
offence such as Money Laundering.
In practise, I suspect that the major-
ity of issues are resolved amicably,
PAUL SAVAKER
Paul Savaker joined UBACE in January 2014 as the Head of Compliance and
MLRO. Paul was trained in Citibank London where he worked throughout their
Corporate and Investment banking operations departments on different assign-
ments for 17 years.
however, the regulators like to make
examples of people by publicly repri-
manding, banning them from the busi-
ness and fining them, when they think
they need to, particularly if they want
to get a message to the market by
making an example of someone. All
such actions taken against individuals
are made public.
What does UBACE bring into the mix?
UBACE is in the process of obtaining
authorisation as a Wholesale Bank.
When we become authorised, we will
be UBA group’s European Bank. Over
time we should be able to develop
the brand by accommodating the
needs of Africans who trade in Europe
and Europeans wanting to invest in
Africa.
UBACE is very well placed to facilitate
the connections required in attracting
European Investors to Africa through
the UBA Group.
With the changes in the EU – particu-
larly BREXIT, what regulatory changes
do you anticipate will affect UBACE
and Banking in general?
The UK has spent forty years in the EU
and written into its statutes forty years’
worth of EU law. The UK now has to
enact the Great Repeal Bill which
effectively takes away the power of
European law. The task then is to write
back into UK law those laws it wants
to keep. In effect we expect a lot of
EU banking law to be rewritten into UK
law. The UK wants to retain equivalent
legislation after BREXIT so that regula-
tion does not become a barrier to UK
EU business.
How can Compliance play a pivotal
role in growing the UBACE business?
We should be proud to be a compli-
ant bank and use that as a brand
message to attract the discerning cus-
tomer. Compliance has to make itself
an enabler of business rather than a
barrier to it. It’s very easy to be so risk
averse that business is turned away.
The challenge is in finding compliant
ways of facilitating business.
