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A Summary of Bank of Lithuania's Dear CEO Letter, 2021.
A Summary of Bank of Lithuania's Dear CEO Letter, 2021.
Agenda
Introduction
Background
Strategic Direction
Compliance Requirements
Best Practices
Conclusion
Links
Introduction
Welcome to the presentation on Regulatory Expectations for FinTech
Companies.
In this session, we'll explore a communication from the Bank of
Lithuania addressing regulatory expectations for electronic money and
payment institutions.
We'll discuss key objectives outlined in the Dear CEO letter and its
implications for the FinTech sector.
Let's begin by understanding the context and importance of regulatory
compliance in the evolving financial landscape.
Background
The Bank of Lithuania issued a Dear CEO letter to electronic money
and payment institutions in Lithuania, outlining regulatory
expectations for governance, internal control, and compliance culture
enhancement.
Emphasis was placed on compliance with legal requirements and the
alignment of business expansion with operational readiness. Personal
accountability of company managers was underscored, with increased
attention to management assessment.
The letter forms part of planned supervisory measures to mature the
FinTech sector and strengthen compliance culture, aligning with the
Bank of Lithuania's strategic directions for 2021-2024.
Strategic Directions
The Bank of Lithuania's strategic directions for 2021-2024 prioritize the
maturity and compliance culture within the FinTech sector.
Regulatory oversight and adherence to legal requirements are
emphasized as fundamental pillars for sustainable growth and
development.
The strategic focus aligns with the broader objective of fostering a
robust and responsible financial ecosystem that instills trust and
confidence among stakeholders.
Compliance Requirements
1. Strengthening of Governance, Internal Control, and Compliance Culture
Creation of internal control mechanisms
Adaptation of internal control processes, policies, and procedures
Implementation of risk management strategy
Appointment of key personnel: compliance officer, information security officer, anti-money laundering
officer
Importance of Compliance with Legal Requirements
Build Strong Internal Controls: Develop comprehensive internal control mechanisms covering governance, risk management, and procedures for risk identification and
monitoring.
Assign Responsibility Wisely: Designate qualified individuals to oversee compliance functions such as risk management, AML/CTF regulations, and information security.
Follow Staffing Guidelines: Adhere to staffing requirements, including roles like a compliance officer and an AML/CTF officer, adjusting as needed for business growth.
Regular Risk Assessments: Conduct regular assessments of ICT and security risks, and money laundering and terrorist financing risks, taking steps to mitigate identified
risks.
Submit Reports Promptly: Ensure timely submission of reports, including financial statements, by establishing effective internal control procedures.
Protect Customer Funds: Establish procedures for protecting customer funds and regularly review and update them for transparency and accountability.
Maintain Equity Compliance: Continuously monitor compliance with equity capital requirements and aim to maintain sufficient levels to cover potential losses.
Handle Complaints Transparently: Develop a transparent process for investigating and resolving customer complaints in line with regulatory standards.
Embrace Continuous Improvement: Foster a culture of ongoing monitoring and improvement to ensure sustained compliance with regulations. Regularly review internal
controls and compliance processes for enhancement.
Conclusion
In conclusion, the 'Dear CEO' letter from the Bank of Lithuania serves as a
comprehensive guide for financial institutions, outlining essential regulatory
requirements and expectations. It emphasizes the importance of robust compliance
measures, risk management protocols, and internal controls to ensure the integrity and
stability of financial markets. By adhering to the guidelines set forth in the letter,
institutions can enhance their regulatory compliance, mitigate operational risks, and
uphold the trust and confidence of stakeholders. It is imperative for CEOs and
responsible persons within institutions to carefully review and implement the
recommendations provided in the letter, fostering a culture of compliance and
continuous improvement. Together, with a proactive approach to regulatory
compliance, financial institutions can navigate challenges effectively and maintain their
integrity in the dynamic landscape of the financial industry.
Thank you.
Should you have any questions, do not hesitate to reach out at
kate.Stasoulakou@gmail.com, Katerina Stasoulakou