Annual Report 2014 Corporate governance system in BBVA Compliance system Internal control model Standards of conduct


Compliance system

The Group’s Compliance System constitutes one of the bases upon which BBVA consolidates its institutional pledge to conduct all operations and businesses in accordance with strict codes of ethical conduct. In line with the principles set forth by the Bank for International Settlements (BIS) and the EU Markets in Financial Instruments Directive (MiFID), the Compliance unit continues to articulate its business around the development and implementation of policies and procedures, the dissemination and training in matters of compliance and the identification, assessment and mitigation of potential compliance risks, understood as those that affect the following issues: 

  • Conduct on the markets.
  • Dealing with conflicts of interest.
  • Prevention of money laundering and terrorist financing.
  • Personal data protection.
BBVA assumes the institutional pledge to conduct all businesses and operations in accordance with strict codes of ethical conduct

The model of compliance risk assessment and management associated with these matters is global in nature. It is not a static concept; it evolves over time, strengthening those elements and pillars on which it is based and anticipating new developments and initiatives that may arise in this field. This model is built on the following pillars:

  • A suitable organizational structure with a clear assignment of roles and responsibilities throughout the organization.
  • Policies and procedures that clearly define positions and requirements that need to be applied.
  • Mitigation processes and controls to enforce these policies and procedures.
  • A technology infrastructure focused on monitoring and designed to guarantee the above.
  • Communication and training systems and policies to raise employee awareness of the applicable requirements.
  • Metrics and indicators to supervise global model implementation.
  • Independent periodic review of effective model implementation.

In 2015, the documentation and management of the model continued to be boosted across the jurisdictions in which BBVA is present through a set of technological tools and improvements in internal processes, which Compliance deploys gradually worldwide. In 2015, this effort has been particularly significant in Turkey, following the integration of  Garanti Group in BBVA.

In 2015, BBVA continued to boost the documentation and management of the compliance model, particularly in Turkey, following the integration of Garanti

Ethical and legal conduct consultancy

BBVA has reached a milestone in 2015 in its permanent commitment to integrity in business, having updated its Code of Conduct to:

  • Adapt it to new regulatory demands and social expectations: (a) recommendations from international bodies (BIS, EBA, ESMA, etc.); (b) regulatory developments; (c) high demands from supervisory bodies and greater social expectations for a demanding business culture of ethics and legal compliance; and (d) a new social and economic environment.
  • Leverage the experience accumulated during 12 years through consultations and criteria of practical application, established since the previous Code of Conduct was approved in 2003.
  • Adapt it to the Group's new, more international organizational structure.

BBVA's new Code of Conduct sets out for the Group's companies, suppliers and third parties, how BBVA views integrity: it is a basic tool for implementing a culture of respect for legality, guaranteeing that BBVA's activities are conducted in accordance with ethical criteria and corporate values, clearly reflecting that the conduct of BBVA Group's employees must be legal, morally acceptable and publishable, and providing behavioral guidelines in line with the Group's principles (prudence, integrity and transparency), as well as procedures for helping employees clarify any doubts and make it easier for them to fulfill their obligations. It also contains a simpler and centralized whistleblowing channel to report activities or situations related to BBVA that could infringe regulations or its values and guidelines.

Formally, the new Code represents a change of style, to one that is more direct, closer, simpler and more accessible. It is also a benchmark document with respect to conduct, limiting its content to basic principles and guidelines, while facilitating access to the policies, procedures and detailed internal regulations through a system of interactive links.

The Code of Conduct is applicable to all BBVA Group companies. It has been circulated individually across the Group to ensure that all personnel are familiar with its content and is also posted on the Bank's website (www.bbva.com) and the employee site (intranet). Formal adherence to the Code is through a technological development based on an electronic signature scheme, thus contributing to a more efficient and simpler process, in line also with BBVA Group's technological innovation strategy.

The content of the Code of Conduct is structured around the following blocks: conduct towards our customers; conduct towards our colleagues; conduct towards the business; conduct in society; and application.

To raise global awareness, a communication plan has been defined and launched, supported by audiovisual media, to ensure the involvement of the Organization's senior management and also of the people who have to apply it on a daily basis in the different countries.

BBVA has updated its Code of Conduct in 2015, which sets out the Group's view of integrity. It entails a different style, more direct, closer, simpler and more accessible

An online training plan has also been implemented so all Group employees, through an attractive and interactive way, can (i) gain better knowledge of the Code; (ii) become familiar with the principles and operating guidelines established therein; and (iii) become aware of the importance of applying the operating guidelines in their daily activity. At the end of the course, employees complete an evaluation questionnaire to reinforce the knowledge acquired.

The communication, training and adherence plans are key pillars for the effective implementation of the Code. Its definition has been one of the milestones of the Group's activity in 2015 and completing its execution will be one of its basic tasks in 2016.

In addition, in 2015 the Compliance unit continued to provide consultancy support to members of the Group and senior management for the application of the Group Code of Conduct. Specifically, the Corporate Compliance Unit answered 57 individual queries, made either in writing or by phone. The queries focused basically on the acceptance of gifts or personal benefits, on carrying out other professional activities, on the handling and management of potential conflicts of interest and on the management of personal wealth.

Prevention of money laundering and terrorist financing

Prevention of money laundering and terrorist financing (henceforth referred to as PML&TF) constitutes above all an ever-present objective that BBVA Group associates with its pledge to make improvements in the different communities in which it operates.

For BBVA Group, ensuring that its products and services are not used for illegal purposes likewise constitutes an essential requirement for safeguarding its corporate integrity, and thereby one of its main assets: the trust of the people and institutions it deals with on a day-to-day basis (customers, employees, shareholders, suppliers, etc.) in the different jurisdictions where it operates.

To achieve this objective, as a global financial group with branches and subsidiaries that operate in numerous countries, BBVA Group has adopted a corporate risk management model which covers all compliance issues (see description in the Compliance System section). This model is applicable to all of the entities forming part of BBVA Group within the scope of PML&TF and not only takes into account regulations on prevention of money laundering in the jurisdictions in which BBVA operates, but also incorporates the best practices in the international financial industry in this regard, as well as the recommendations provided by international institutions such as the FATF (Financial Action Task Force).

It is also worth noting that the model for managing the risk of money laundering and terrorist financing is constantly evolving and subject to independent review. In particular, risk analysis ensures that controls can be improved and any additional mitigating measures that may be required to bolster the model can be implemented.

For BBVA, ensuring that its products and services are not used for illegal purposes constitutes an essential requirement

In 2015, BBVA Group continued working to strengthen the aforementioned model for managing the risk of money laundering and terrorist financing by: 

  • Increasing human resources assigned directly to the PLD&TF units in each jurisdiction.
  • Making progress in implementing improvements through centralized guidelines for customer risk categorization or assignment systems with regard to PLD&TF, based on the factors identified by the sector as relevant for quantifying the risks of money laundering. The progress made in Spain, Argentina, Colombia, Chile and Venezuela has been particularly significant.
  • Upgrading the monitoring systems already in place in all Group units. 

In 2015, BBVA took the decision to replace the main monitoring tool implemented in the Group's units and began deployment of the new version, first in Spain and later in the other jurisdictions. This new tool, along with other initiatives that make the most of new technological opportunities (for example, big data), improve BBVA Group's ability to detect suspicious activities in its different entities.

A total of 97,574 employees across the Group received training in PML&TF in 2015. Of these, 12,138 did so through on-site activities and 85,436 through online training.

At the same time, BBVA Group continued to work in partnership with governmental bodies and international organizations in this field. One example is BBVA's participation in the Institute of International Finance's working group on international correspondents.

Lastly, the model for managing the risk of money laundering and terrorist financing is constantly evolving and subject to independent review. Pursuant to Spanish regulations, an independent expert annually audits the PML&TF system for the parent company (including supervision of subsidiaries and branches abroad) and all companies subject to PML&TF standards in Spain. This review is complemented in each jurisdiction with internal audits, external audits and reviews by local supervisory bodies themselves.