Which term refers to a bank's procedure for managing compliance for its products?

The term that refers to a bank's procedure for managing compliance for its products is known as a compliance management system. This system encompasses the structured processes and policies established by a bank to ensure that its operations and products adhere to relevant laws, regulations, and internal guidelines. A robust compliance management system includes elements such as risk assessment, compliance monitoring, training, and reporting mechanisms, all designed to mitigate compliance risks and promote a culture of adherence within the organization.

Understanding the importance of a compliance management system is crucial for banks, as it not only helps in avoiding legal penalties but also fosters trust among customers and stakeholders. This system plays a central role in ensuring that all products offered by the bank meet regulatory expectations, thereby protecting the organization from potential compliance breaches that could lead to financial losses or reputational damage.

In contrast, a compliance audit refers to an examination of the bank's compliance processes, and regulatory oversight pertains to supervision by external regulatory bodies, focusing on ensuring compliance across financial institutions. Risk assessment involves identifying and analyzing potential compliance risks, but it does not encompass the broader management and procedural framework that a compliance management system provides.