Triodos Bank defines compliance risk as the risk of legal or regulatory sanctions, material financial loss or loss to reputation that Triodos Bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory standards, and codes of conduct applicable to its banking activities. Internal policies, procedures and awareness activities are in place to guarantee that co-workers in all functions comply with relevant laws and regulations.

The compliance function independently monitors and challenges the extent to which Triodos Bank complies with laws, regulations and internal policies, with an emphasis on customer due diligence, anti-money laundering, treating customers fairly, preventing and managing conflicts of interest, data protection and the integrity of co-workers.

Triodos Bank has a Group compliance team which is led by the Group Director Compliance, who is also the Group Data Protection officer. Compliance officers and Data Protection officers are appointed in every banking business unit with a functional line to the central Compliance department. The Group Director Compliance reports to the CRO. An escalation line to the Chair of the Audit and Risk Committee supports the independence of the compliance function.

Triodos Bank aims to serve the interests of all stakeholders by actively fulfilling its role as a gatekeeper in the financial system and by countering money laundering and terrorism financing. The bank applies various procedures and measures in this respect.

In 2018, De Nederlandsche Bank (DNB) conducted a thematic, sector-wide survey among Dutch banks, focusing on the measures that the banks have taken to prevent money laundering and terrorism financing. Following this survey, DNB concluded that Triodos Bank is required to implement enhanced measures concerning customer due diligence and monitoring of customer transactions. On 6 March 2019, DNB imposed a formal instruction (aanwijzing) on Triodos Bank N.V. to remedy shortcomings in compliance with provisions of the anti-money laundering and countering the financing of terrorism legislation and with financial supervision laws. Triodos Bank accepted this instruction and implemented mitigating measures. Following the formal instruction Triodos Bank received an administrative penalty on 14 December 2020 that was paid without delay.

In 2020, DNB performed an on-site inspection regarding the compliance function. The first purpose was to obtain assurance that the compliance function is sufficiently empowered to provide independent advice to and assume a challenging role to the first line and management. The second purpose was to assess whether the management body has an adequate role in overseeing the implementation of a documented compliance framework. Regarding the first purpose DNB recognised the improvements that were made but concluded that the functioning of the compliance function is not in all aspects sufficiently effective and that the existing improvement plan needs more detailed guidance. Regarding the management oversight, DNB concluded that the management body is not sufficiently involved in overseeing the compliance function.

Based on both findings a remediation plan was prepared at the beginning of 2021 and progress with the remediation of the findings is on track.

Triodos Bank was not involved in any other material legal proceedings or any other further sanctions associated with non-compliance with legislation or regulations in terms of financial supervision, corruption, advertisements, competition, data protection or product liability.