Governance, Risk &
Compliance
ESG
Banks are under growing pressure to address environmental, social, and governance (ESG) risks amid increasing regulatory demands and stakeholder expectations. With 85% of global banks reporting ESG metrics, compliance is now essential for operational resilience and market trust. FORFIRM’s comprehensive guide outlines strategies for navigating ESG risk compliance effectively.
Banks must align with directives like the Corporate Sustainability Reporting Directive (CSRD), focusing on environmental targets, social responsibility, and governance standards. Building robust ESG data infrastructure is crucial, ensuring completeness, accuracy, and timeliness while integrating analytics for real-time insights and reporting.
FORFIRM emphasizes climate risk management by addressing physical, transition, and systemic risks.
Greenwashing prevention strategies, portfolio assessments, and carbon compensation initiatives help mitigate reputational and financial risks. Integration of ESG principles into investment frameworks and operational strategies strengthens long-term sustainability.
Staff training, stakeholder communication, and transparent reporting are critical for success.
Advanced monitoring systems and AI-enabled analytics ensure compliance while fostering proactive decision-making. By leveraging FORFIRM’s expertise, banks can:
- implement resilient ESG frameworks
- meet regulatory obligations
- achieve sustainable growth in an increasingly competitive and environmentally conscious market
Digital currencies
Switzerland is at the forefront of the digital currency revolution, with its central bank leading the way in developing a digital Swiss franc.
The nation’s journey began with the launch of a pilot program in December 2023, combining digital currency with real-world transactions. This effort builds on the Swiss National Bank's (SNB) Project Helvetia, which enables wholesale central bank digital currency (CBDC) operations through blockchain-based systems. The project is set to expand through 2026, with continuous innovations in financial infrastructure, including distributed ledger technology and advanced security measures.
Switzerland’s strong fintech ecosystem, bolstered by over 1,000 blockchain companies, positions the country as a global leader in digital finance. Legal frameworks for blockchain technology, established in 2021, ensure security and innovation go hand-in-hand. The adoption of blockchain by Swiss banks continues to grow, with more than 80% actively expanding crypto offerings.
However, public acceptance remains a challenge, as privacy concerns persist among citizens. Despite this, studies show that once people experience digital services, they tend to support them more. As Switzerland moves forward with digital currency, it balances cutting-edge innovation with robust security and regulatory compliance, ensuring that it remains a trusted leader in the global digital finance landscape.
Cyber security
Cybersecurity in the banking sector has become a critical issue, with cyberattacks increasing by 238% since the COVID-19 pandemic. Governance, Risk, and Compliance (GRC) frameworks are essential in addressing these threats by combining governance structures, risk management, and compliance protocols to safeguard assets and data. Effective GRC systems help banks meet regulatory requirements, mitigate risks, and build resilience.
The rise of cyberattacks, including ransomware, phishing, and DDoS, highlights the vulnerability of financial institutions. State-sponsored threats from countries like Russia, China, and North Korea further complicate security. The average cost of a data breach in the banking sector is CHF 3.88 million, underscoring the need for a comprehensive security strategy.
Building resilience requires multi-layered security architecture, including encryption, monitoring, and access controls. Incident response planning, business continuity, and regular stress tests help ensure banks remain operational during attacks. Furthermore, integrating AI and providing continuous staff training are crucial for effective cybersecurity. A robust GRC framework is vital for financial institutions to adapt to evolving cyber threats.
PCI compliance
Achieving PCI compliance is crucial for businesses handling payment card data to ensure security and protect customers' sensitive information.
The Payment Card Industry Data Security Standard (PCI DSS) provides a framework with key requirements:
- securing networks
- protecting cardholder data
- maintaining vulnerability management.
Businesses are categorized into four compliance levels based on transaction volume,
each with specific validation requirements. The process begins with a gap analysis to assess existing security measures and identify compliance gaps. Mapping data flows, prioritizing security actions, and conducting vulnerability scans are essential steps in the assessment phase.
Creating a compliance roadmap involves
- setting realistic timelines
- allocating resources
- selecting the right security tools
Implementing robust security measures like firewalls, encryption, and strict access controls is vital. Regular security testing ensures the effectiveness of these controls. The final steps include working with a Qualified Security Assessor (QSA) to validate compliance through formal audits, resulting in certification. Ongoing monitoring and updates help maintain compliance.
FORFIRM, a PCI-certified QSA, offers tailored solutions for assessment, implementation, validation, and ongoing support. By following a structured compliance process, organizations can reduce risks and safeguard both their business and customer data, ensuring long-term success in maintaining PCI compliance.
GRC finance
Switzerland’s banking sector, managing over $7.3 trillion in assets, is globally renowned for its stability and robust regulatory framework. Key pillars include:
- consolidated supervision
- stringent liquidity requirements
- advanced risk management
- innovative RegTech solutions.
Swiss banking regulations underwent significant reforms post-2008, aligning with EU standards while ensuring financial system resilience. The Swiss Financial Market Supervisory Authority (FINMA) adopts a risk-based supervisory approach, emphasizing capital adequacy and liquidity. Systemically important banks face heightened requirements, including rigorous stress testing and compliance with Basel III standards.
Consolidated supervision enables FINMA to oversee financial groups holistically, ensuring comprehensive risk management across entities. Cross-border activities demand stringent compliance with legal frameworks, minimizing reputational and legal risks.
Liquidity management has strengthened significantly, guided by Basel III standards. Banks must meet a 100% Liquidity Coverage Ratio (LCR), with enhanced requirements for systemically important institutions. Recent crises, like Credit Suisse, prompted the creation of the Public Liquidity Backstop to safeguard against future shocks.
Swiss banks excel in adopting RegTech for compliance automation and SupTech for supervisory efficiency. Enhanced data management standards and digital reporting requirements ensure robust cybersecurity and operational resilience. By combining regulatory rigor, technological innovation, and adaptability, Switzerland maintains its position as a global financial leader.