Breaking Down Barriers: Adapting Three Lines of Defense for Ever Changing Banking Regulations

Abstract

The changing regulatory landscape presents a significant challenge to banks. This paper discusses the challenges associated with adapting the Three Lines of Defense (3LOD) model in order to comply with regulatory changes within the banking industry. The paper focuses on the challenges of adapting to the rapidly evolving banking regulatory environment. The three lines of defense (LoDs) model is a framework that enables banks to manage risk and compliance with regulatory requirements with precision and accountability. The 3LODs are based on a three-line strategy. The LLOD model enables a bank to identify and manage risks accurately and effectively. The use of technology and analytics can enable banks to automate control checks to improve the speed and precision of their control checks. To conclude, banks need to refine the three lines of defense to keep up with an ever-evolving regulatory environment to ensure compliance with rules, identifying risks accurately, and enhancing their risk management capabilities.