Speaker 1: In today's world, regulatory compliance has become a key component of business strategy for financial institutions. In this video, we'll be discussing the reasons why compliance is so important. Compliance refers to a set of rules and regulations that financial institutions must follow to ensure that they are conducting their business in an ethical and in a legal manner. Compliance can include everything from anti-money laundering laws to data privacy regulations. The importance of compliance cannot be overstated. Financial institutions that fail to comply with regulations face significant legal and financial consequences, including fines, loss of business licenses and damage to their reputation. For example, in 2018, the Dutch ING bank was fined $900 million for failing to detect and prevent money laundering through its accounts. Compliance is also important for protecting the interest of customers and investors who trust our financial institutions with their money. While compliance can be challenging, it can also provide benefits to financial institutions. By implementing a comprehensive compliance program, businesses can operate more efficiently, reduce risk and improve customer trust. In 2016, a major US-based financial institution, Wells Fargo, implemented comprehensive compliance. compliance program, following a major scandal in which employees opened millions of unauthorized accounts for customers.

Speaker 2: People were feeling so pressured to meet sales quotas that they were cheating. We're talking about a scandal here that involves thousands of their employees cheating tens of thousands of customers out of money and making millions of dollars doing it for the bank.

Speaker 1: This scandal resulted in significant legal and financial consequences for the bank, including a $185 million fine. By implementing a comprehensive compliance program, Wells Fargo was able to regain the trust of its customers and investors.

Speaker 3: I was brought in to bring about substantial change at Wells Fargo, and we have made tremendous changes. I've also been very clear since the day I arrived that it was going to take multiple years to make all of the changes that were necessary. So that the company was run in a way that I'd be proud of.

Speaker 1: In 2020, the bank was recognized as one of the world's most ethical companies by Ethisphere for the third consecutive year. The success story of Wells Fargo demonstrates the benefits of compliance and the importance of implementing a comprehensive compliance program. In conclusion, compliance is a critical component of the business strategy for financial institutions. By implementing a comprehensive compliance program, financial institutions can ensure that they remain in compliance and avoid legal and financial consequences of non-compliance. Thank you for watching.