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Home / case studies / Case study: How SCB combats money laundering

Case study: How SCB combats money laundering

Siam Commercial Bank (SCB) is Thailand’s largest commercial bank, offering, during its more than 110 years in business, deposits and lending along with a wide range of other products and services. SCB focuses on improving its operations relating to Anti-Money Laundering  Tweet This! and Counter-Terrorism and Proliferation of Weapons of Mass Destruction, to align with the business context in the digital age and changes in laws and global practices.

This case study is based on the 2018 Sustainability Report by SCB published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Under the vision to serve as “The Most Admired Bank” and firmly committed to combatting money laundering, SCB uses technologies to improve its operational systems such as Know-Your-Customer, as well as processes to be up-to-date and optimally efficient. In order to combat money laundering SCB took action to:

  • implement a Transaction Reporting System
  • introduce a Know-Your-Customer solution
  • provide AML/CFT training

What are the material issues the company has identified?

In its 2018 Sustainability Report SCB identified a range of material issues, such as cyber security, talent attraction and retention, customer expansion, financial inclusion and financial literacy, operational eco-efficiency. Among these, combatting money laundering stands out as a key material issue for SCB.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups SCB engages with:

Stakeholder Group                Method of engagement
Customers

 

 

·      Customer relationship-building activities

·      Information sessions on SCB financial products and services

·      Providing financial advice and knowledge to customers through online media, branch network and other electronic channels

·      Customer satisfaction surveys through telephone, questionnaire, and electronic channels

·      Complaint channels and services through SCB Service Centre, Call Centre and branch network

Employees

 

 

·      Meetings and online channels for policy and news announcement

·      Employee meetings, seminars, and CSR activities

·      Performance evaluation

·      Employment engagement survey

·      Employee development programme

·      Employee recognition programme

·      Employee hotline

Shareholders

 

 

·      Annual General Meeting

·      Extraordinary General Meeting

·      56-1 Report

·      Annual Report (Form 56-2)

·      Press Release

·      Quarterly financial report

·      Investor meeting/conference

·      Investor call

·      Equity analyst meeting

·      Global roadshow event

Society and Environment

 

 

 

·      Projects and initiatives by SCB and the Siam Commercial Bank Foundation

·      Providing financial literacy education via online and electronic channels

·      Community and social survey

·      Community engagement activities

Regulators

 

 

 

·      Assign Compliance function to serve as the Bank’s regulatory liaison

·      Attend meetings and hearings on regulatory policies and guidance from relevant authorities

·      Attend forums on regulatory compliance

·      Prepare and provide support for regulatory audit

·      Seek feedback and guidance on regulatory compliance

·      Offer feedback on regulations through public hearings

 How stakeholder engagement was made to identify material issues

To identify and prioritise material topics SCB carried out in-depth interviews with stakeholders to gather their feedback and opinions on material sustainability topics along economic, social, and environmental dimensions – and their prioritisation of such topics.

What actions were taken by SCB to combat money laundering?

In its 2018 Sustainability Report SCB reports that it took the following actions for combatting money laundering:

  • Implementing a Transaction Reporting System
  • In 2018, SCB introduced the Automated Anti-Money Laundering Transaction Monitoring System (AMLTMS) for monitoring and reviewing customers’ transactions in accordance with the relevant laws based on explicitly specified conditions and guidelines, such as account surveillance for self-employed customers, customers with low or no income, suspicious ATM/ CDM transactions, suspicious internet banking transactions that do not align with the reported occupation or income etc. If transactions are found to be suspicious or inconsistent with the customer’s income and occupation, AMLTMS will perform analysis and customer due diligence in accordance with the Anti-Money Laundering Act and the Counter-Terrorism and Proliferation of Weapons of Mass Destruction Financing Act. The Systems will then accurately, efficiently, and promptly report suspicious transactions to the Anti-Money Laundering Office (AML), as required by law. Additionally, SCB uses the SAS Transaction Monitoring system, to facilitate transaction reporting to the Anti-Money Laundering Office in a complete, accurate, and timely fashion.
  • Introducing a Know-Your-Customer solution
  • SCB has developed an electronic Know-Your-Customer system (e-KYC) for new customers, an innovation that allows customers to open a bank account without a need to visit a bank branch network. With this innovation, customers can open a bank account using their passports aided by near-field communication (NFC) technology embedded in their mobile phones to verify passport photos with facial recognition. This technology helps SCB minimise errors in the KYC process. In addition, SCB has collaborated with the Bank of Thailand, the Thai Bankers Association and other related agencies on the National Digital ID initiative to raise the KYC/CDD (Customer Due Diligence) standard for banking or government services and help streamline back-office processes for customers of financial institutions. This initiative allows financial institutions access to reliable data sources, to facilitate KYC compliance.
  • Providing AML/CFT training
  • SCB has organised training on Anti-Money Laundering, Counter-Terrorism and Proliferation of Weapons of Mass Destruction Financing (AML/CFT) for management and employees throughout the organisation, with 25,737 employees completing the training. Relevant laws and practices are also communicated through the Bank’s circular letters and notifications, to make sure SCB employees are well-informed on, for instance, AML/CFT laws, regulations, and announcements, roles of financial institutions, and customer due diligence procedure, and can then apply the knowledge to perform their duties with confidence. SCB also provides this information in the form of classroom and e-learning, with content that is concise and easy to understand.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 205-2 Communication and training about anti-corruption policies and procedures

Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:

  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Anti-corruption

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



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References:

1) This case study is based on published information by SCB, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to SCB: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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