Strategic Studies of Jurisprudence and Law

Strategic Studies of Jurisprudence and Law

Management of Legal and Compliance Risks in Iran's Banking Industry (Risk Matrix Approach)

Document Type : research

Authors
soran rashidi 1
Seyed Mohammadreza Miri Lavasani 2
Mahdi montazer 3
1 PhD student in Finance-Financial Law, department of management and economics, science and research branch, Islamic Azad University, Tehran, Iran.
2 Assistant professor, department of management environmental, Faculty of natural resources and environment, science and research branch, Islamic Azad University, Tehran ,Iran .
3 Assistant Professor, department of Private Law, Faculty of Human Sciences, Damavand Branch, Islamic Azad University , Tehran, Iran.
10.22034/ejs.2024.452328.1764
Abstract
Background and purpose: the lack of proper legal risk management and compliance causes banks to be exposed to a wide range of criminal, regulatory and civil responsibilities; Therefore, banks should formulate and implement strategic strategies to deal with these risks. Therefore, according to the importance of the subject, the purpose of this research is to compile the legal risk matrix and apply it in the field of banking activity.
Materials and Methods: It is a Mixed Method research (qualitative and quantitative). The qualitative phase of the research is related to the identification of legal risks and adaptation. In the quantitative research phase, the identified indicators are scored to be prioritized using the risk matrix.
Ethical Considerations: In writing the article, the originality of the texts, honesty and trustworthiness have been made.
Findings: Using the views of banking and risk experts, 12 cases of legal risk and 12 cases of compliance risk were identified and their probability of occurrence and effects were scored. Finally, the matrix of legal risks and the adaptation of compilation and related strategies were presented based on the priority and position of the risks.
Results: Banks should carefully monitor legal and compliance risks and allocate their financial resources for them. Implementing a risk management system and adjusting internal processes related to it will improve the legal system and reduce legal and compliance risk.
Keywords
Legal risk
Compliance risk
Banking
Risk matrix
Subjects
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Strategic Studies of Jurisprudence and Law
Volume 6, Issue 2 - Serial Number 21
Studies of economic jurisprudence
Spring 2024
Pages 81-100