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Why Do Banks Find Business Process Compliance so Challenging? An Australian Perspective

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Business Process Management Forum (BPM 2022)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 458))

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Abstract

Banks play an intrinsic role in any modern economy, recycling capital from savers to borrowers. They are heavily regulated and there have been a significant number of well publicized compliance failings in recent years. This is despite Business Process Compliance (BPC) being both a well researched domain in academia and one where significant progress has been made. This study seeks to determine why Australian banks find BPC so challenging. We interviewed 22 senior managers from a range of functions within the four major Australian banks to identify the key challenges. Not every process in every bank is facing the same issues, but in processes where a bank is particularly challenged to meet its compliance requirements, the same themes emerge. The compliance requirement load they bear is excessive, dynamic and complex. Fulfilling these requirements relies on impenetrable spaghetti processes, and the case for sustainable change remains elusive, locking banks into a fail-fix cycle that increases the underlying complexity. This paper proposes a conceptual framework that identifies and aggregates the challenges, and a circuit-breaker approach as an “off ramp” to the fail-fix cycle.

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Notes

  1. 1.

    https://www.austrac.gov.au, https://www.apra.gov.au.

  2. 2.

    https://home.kpmg/au/en/home.html, https://www.robertwalters.com.au.

  3. 3.

    https://www.ascentregtech.com/blog/the-not-so-hidden-costs-of-compliance/.

  4. 4.

    https://www.apra.gov.au.

  5. 5.

    The first author is a former Senior Executive of two of the four banks studied, with more than 15 years of experience.

  6. 6.

    The Banking Executive Accountability Regime establishes accountability obligations for senior bank executives and directors.

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Acknowledgments

We thank the interviewees who generously gave their time and shared their thoughts to help produce this paper.

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Authors and Affiliations

  1. University of Melbourne, Melbourne, Australia

    Nigel Adams, Adriano Augusto, Michael Davern & Marcello La Rosa

Authors
  1. Nigel Adams
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  2. Adriano Augusto
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  3. Michael Davern
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  4. Marcello La Rosa
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Corresponding author

Correspondence to Nigel Adams .

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Editors and Affiliations

  1. Sapienza University of Rome, Rome, Italy

    Claudio Di Ciccio

  2. Eindhoven University of Technology, Eindhoven, The Netherlands

    Remco Dijkman

  3. Universidad de Sevilla, Seville, Spain

    Adela del Río Ortega

  4. Technical University of Munich, Garching, Germany

    Stefanie Rinderle-Ma

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Adams, N., Augusto, A., Davern, M., Rosa, M.L. (2022). Why Do Banks Find Business Process Compliance so Challenging? An Australian Perspective. In: Di Ciccio, C., Dijkman, R., del Río Ortega, A., Rinderle-Ma, S. (eds) Business Process Management Forum. BPM 2022. Lecture Notes in Business Information Processing, vol 458. Springer, Cham. https://doi.org/10.1007/978-3-031-16171-1_1

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  • DOI: https://doi.org/10.1007/978-3-031-16171-1_1

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