The Bank has designed and implements a compliance program which ensures compliance with applicable law on the prevention of money laundering and combating terrorist financing, and with other sub-legal acts adopted pursuant to this law.
The bank performs all necessary actions and takes measures to protect its reputation and prevent its products and services from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing purposes.
BKT Kosovo has maintained a conservative and consistent approach to risk throughout its history. This has helped us to protect our customers, to bear responsibility and to support the sustainable growth of the economies we serve. An active approach to risk management remains the key to our success.
We face some types of risk as a result of our business activities. We categorize our material risks to financial risks and non-financial risks. Financial risks include credit risk (such as credit risk exposure failure, portfolio concentration, country risk, sector risk, etc.), market risk (including interest rate, exchange rate, capital, and other risks mutual assets), and the liquidity risk. Non-financial risks pose operational risks and reputational risks (with the risk of sub-categories such as compliance risk, legal risk, risk of information security in our operational risk framework). For all material risks, common risk management standards are implemented, including dedicated risk management function, and determining the risk appetite along the level of risk.
Our Risk Identification and Evaluation Processes use the Three Lines of Defense approach to the first line that identifies the main risks and the second line that completes the risk management activities in the business lines, and the audit function such as the third line of defense acting as an independent control.
Credit risk, market risk and operational risk participate in the adequacy of regulatory capital calculations. As part of the internal capital adequacy assessment process, we calculate the amount of economic capital for the credit, market, and operational risk to cover the risks created by our business activities taking into account the effects of diversification in all types of the risk.
In order to evaluate and adequately address risks, we also actively promote an increase in “Risk Culture” in the bank, particularly through training and a presentation program, so that all employees are able to manage the risks that relate to their activity.