Analysis of compliance risk management strategies in Uganda’s financial institutions: a case of Stanbic Bank Limited

Abstract

Although financial institutions in Uganda have been investing in establishing compliance risk management frameworks, compliance risks remain a threat to financial institutions. The purpose of the study was to analyze compliance risk management strategies employed in Uganda’s financial institutions using a case study of Stanbic Bank Limited. Its objectives included: identifying the strategies used in managing compliance risks in Stanbic Bank (U) Limited; assessing the effectiveness of compliance risk management strategies of Stanbic Bank (U) Limited; and examining the challenges to effective implementation of compliance risk management strategies at Stanbic Bank (U) Limited. A case study research design was employed to achieve the above study objectives. This design incorporated a cross-sectional mixed approach in which both qualitative and quantitative data collection and analysis methods were combined within a cross-sectional framework. Quantitative data was processed and analyzed using descriptive statistics, while qualitative data was analyzed thematically. The study found that having a dedicated department that oversees compliance risk management issues, a clearly defined compliance risk management policy framework, procedures to ensure compliance with regulatory requirements, regular internal audits to assess its compliance with laws and regulations, regular employee training programs on compliance risks management, monitoring and reporting systems to mitigate against compliance risks, a culture of compliance within the organization, and Anti-Money Laundering (AML) controls, constitute the compliance risk management strategies employed by Stanbic Bank (U) Limited. The study also found that Stanbic Bank (U) Limited’s compliance risk management strategies have proven highly effective in mitigating regulatory violations, building trust, managing emerging risks, and aligning operations with laws and best practices. Finally, the study revealed four key challenges to effective compliance risk management at Stanbic Bank (U) Limited, including insufficient resources, complex regulatory environment, emerging technology risks, and employee resistance to change. The study recommends to Stanbic Bank Uganda Limited should solidify its commitment to compliance, protect its reputation, and achieve greater compliance risk management success, should continue prioritizing its successful compliance risk management strategies and should invest in addressing these highlighted challenges, through focusing on allocating sufficient funding, prioritizing agility and continuous awareness, proactively managing technology risks, and actively engaging employees to foster a compliance culture.