Advising how to act to letter of the law
David Hsu, managing director, Hong Kong country compliance officer and Greater China compliance head at Citi Hong Kong, explains how he works with multiple parties to ensure the business stays on track with the latest laws and regulations.
Tell us about what you do.
My role is to manage the compliance function for Citi's Hong Kong business. The role of the compliance function is to provide advice to the business on how to act in accordance with relevant laws, regulations and ethical standards. We work with the business to establish and implement compliance and control processes and assist in the establishment of monitoring, surveillance and testing procedures. We identify and manage regulatory and compliance risks so that issues are identified, escalated, reported and addressed in an effective manner. We also work with senior management to build a robust governance, compliance and ethics culture.
How did you get to where you are?
My background is as a chartered accountant and I joined the bank as an internal auditor. An auditing background provided me with a solid foundation to understand the risk management aspect of compliance, and how controls should be implemented. I was also fortunate to have had the opportunity to work in different areas of compliance over the years, both for the Hong Kong and regional businesses.
What do you like most about the job?
My job requires me to work closely with the business, regulators and law enforcement on many issues. It's challenging, yet rewarding, because you are acting as an adviser to the business on how to manage compliance risk. At the same time, compliance needs to work with the regulators on managing regulatory issues and examinations, provide input at an industry level on regulatory guidance consultations, and conduct training.
What have been the most important regulatory changes affecting HK's banking sector?
There are now more laws, regulations, guidelines and circulars issued by regulators that banks or securities companies must follow. For example, following the enactment of the Anti-Money Laundering Ordinance in April 2012 and associated guidelines, many banks reviewed their compliance resource needs and strengthened their governance process. There are also customer-protection initiatives on treating customers fairly, investment sales practices, and privacy.
How has compliance changed and what do you expect going forward?
Nowadays compliance is recognised as a highly professional function. There are a lot more compliance officers in the banking and securities fields than 10 years ago. Many now see compliance as a preferred profession or career choice, having previously been auditors, lawyers, in law enforcement, or from other banking functions. I believe this trend will continue in the next few years.
What are the keys to success in compliance and risk management?
Good communication and analytical skills, and the ability to provide sound compliance advice, are important. Also, as we sometimes have to say "no", it is important to let the business know about the thought processes involved behind these decisions.
What are the key certifications?
The Hong Kong Monetary Authority and Hong Kong Institute of Bankers aim to introduce an enhanced competency framework for compliance and risk professionals, focusing on the technical and ethical skill sets beneficial to practitioners. I would also encourage those interested in a compliance career to broaden their knowledge of banking businesses and products. A good understanding of bank operations is always an asset.