This chapter focuses on the evaluation of the compliance risk management in HSBC and the measures taken by the company to mitigate the risks. It is essential to include this chapter in the research work as it provides information regarding the conceptual understanding of the research topic. It helps in exploring the relationship between different research variables to gain evident outcomes of the research. The review of the available literature is done for gaining information related to each objective of the research. It provides insightful knowledge regarding the research topic to carry out the research in a valid and reliable manner (Ridley, 2012).
As per the view of Wahab and Al-Momani (2010), there are various models and theories that can be applied in the current CRM system of the commercial banks. The commercial banks follow the generic strategic framework that is mainly responsible for the competitive advantage that grows the value of firms. In the commercial bank, to implement the compliance risk management is a generic strategic framework that helps in the sustainable competitive advantage. It can be achieved by the blend of different strategies and it reduces the risk with the help of operational risk domain and statistical decision theory. Shafia et al. (2011) also supports the views of Wahab and Al-Momani (2010) that banks increase their operational excellence, leadership of the product and intimacy of the customers to get better the overall profitability of the product and service of banks. The compliance risk management system can be applied in the HSBC bank in Hong Kong and other commercial banks due to the cost benefit functions.
According to the Agariya and Singh (2012), CRM system helps to build brand image in commercial banks that will improve the service quality, reduce risk, smooth allocation of resources and customer potential. Along with this, banks try to re-engineer and pick up their core business process that enhances the financial performance with the natural approach followed by banking sector. To implement the CRM system successfully, commercial starts number of models and projects that are related to branches of banks, information system and customer relationship management.