Security and Regulatory Compliance

Data and Transaction Security Measures:

• Protection of Data and Transactions: In the digital age, the security of data and transactions is of paramount importance. We employ a multilevel security system, including modern encryption methods, to ensure the safety of all financial transactions and client data. This includes protecting clients from unauthorized access, fraud, and cyber-attacks;

• Monitoring and Analytics: The use of advanced monitoring and analytics technologies enables us to promptly identify and prevent any suspicious activities within our Payment System. We are preparing to utilize tools with artificial intelligence and machine learning for analyzing transaction patterns and early detection of potential threats;

• Training and Development of Personnel: Regular training and qualification improvement of our project participants in cybersecurity and data protection is a key aspect of our strategy. Understanding and adhering to the best security practices by every team member is critically important for protecting our clients and their assets.

Compliance with International and Local Regulatory Standards (Update for 2024)

In the context of the 2024 regulatory standard, the international banking system is facing new and intensified regulatory requirements and directions:

• Focus on Digital Finance and Cryptocurrencies: Special attention in 2024 is given to the regulation of digital finance and cryptocurrencies. Following the actions of the SEC and other American bodies in 2023, it is expected that the focus on regulating cryptocurrency markets will remain high in 2024. This includes controlling the compliance of cryptocurrency exchanges with registration requirements and the offering of unregistered securities;

• Artificial Intelligence and Financial Services: In the context of regulating artificial intelligence and its use in financial services, some regulators emphasize the need for stricter control. In Europe, the introduction of the "AI Act" is expected, which will likely regulate the use of AI in various sectors, including financial services;

• Basel Committee on Banking Supervision (BCBS): BCBS continues its work on identifying and analyzing risks and vulnerabilities in the banking system, with a special focus on risks associated with the digitalization of finance and climate-related financial risks. BCBS is expected to continue assessing the need for additional regulatory measures to address climate-related risks;

• Enhancing Security: Among the significant proposals expected to be finalized in 2024 are new requirements for long-term debt for major banking organizations and the finalization of Basel III standards;

• Consumer Protection and Innovation: In 2024, regulators are expected to focus on consumer rights protection, particularly on the potential negative effects of innovative products, services, and technologies offered by banks.

These regulatory directions reflect the general trends and challenges faced by banks and other financial institutions and underscore the importance of active monitoring and adaptation to changes in the regulatory environment to ensure compliance with both local and international standards.

Conclusion of the "Security and Regulatory Compliance" Section

In light of current and anticipated regulatory changes in the banking sector, our team unequivocally adopts a comprehensive approach to ensuring security and regulatory compliance:

Proactive Response to Regulatory Changes: It is crucial for our team to actively monitor changes in the regulatory landscape, including new requirements in digital finance and consumer protection rights. We will adapt our strategies and operations to align with these changes, ensuring our compliance with both local and international standards;

Integration of New Standards in the Preparation of Bank Operations: In preparing the operational framework, our team will consider new long-term debt requirements and Basel III standards, as well as strengthen our security and risk management systems. This will enable us to effectively respond to changing market conditions and help fortify our future financial stability;

Focus on Consumer Protection and Innovation: In shaping the bank of the future, our team places significant emphasis on protecting consumer rights, especially in the context of new products and technologies. We will carefully assess potential risks associated with the introduction of innovative technologies and take measures to prevent harm to consumer rights;

Continuous Monitoring and Training: We will continue to develop programs for monitoring changes in the regulatory environment and ensure that our staff is well-informed and trained in accordance with the latest requirements and best practices;

Transparency and Openness in Communications: We aim to build a banking structure that maintains a high level of transparency in our operations and an open dialogue with regulators to ensure that all aspects of our activity comply with established norms;

These measures will enable us not only to comply with current regulatory standards but also to adapt to future changes, ensuring reliability and resilience in a dynamic financial environment. 

(Update for 2024)

In 2024, our team faces a number of challenges and opportunities related to ensuring security and regulatory compliance, which must be addressed in real-time, for both founders and depositors. 

Adapting to Changes in Digital Finance Regulation:

We acknowledge the importance of complying with new requirements related to digital finance and cryptocurrencies. This includes implementing updated rules related to reporting and collecting data on small business lending as stipulated in Section 1071 of the Dodd-Frank Act, and preparing our systems and software to comply with these standards;

Enhancing Risk Management: In light of increasing risks associated with high interest rates and potential losses from future fixed income, our team will focus on risk management of the balance sheet and assets during programming. This includes the use of risk management tools, such as derivative financial instruments, to safeguard against various market condition scenarios;

Credit Risk Management: We plan to implement programs that will allow us to closely monitor signs of deteriorating credit conditions, especially in the commercial real estate and construction sectors, where a decrease in prices for office and residential buildings is anticipated. Our approach includes the development of programs for assessing and potentially redirecting credit portfolios to minimize risks. Additionally, intensified supervision will be programmatically conducted, including utilizing the opinions of credit committee members and the four-eyes principle, in the conduct of credit operations involving cryptocurrencies;

Countering Cyber Threats: In light of the growing cyber threats, intensified by the use of AI, our team will focus on strengthening cybersecurity and ensuring protection against fraud. This means increasing investment in technology and IT talents necessary to secure the bank, its clients, and shareholders;

Geopolitical Risks: We recognize the potential impact of geopolitical events on the economic landscape and proactively prepare for various economic scenarios, including actions by the Federal Reserve System to manage liquidity and interest rates, compliance with international sanctions laws, the law on the identification of beneficial ownership, and the law on anti-money laundering and counter-terrorism financing;

Our collective design efforts are aimed at ensuring the flexibility and resilience of our future bank in a dynamic regulatory and economic environment, while providing the highest level of security and compliance with standards for our clients and shareholders.