Abstract
<jats:p>The article is devoted to researching the essence of financial compliance and substantiating the necessity of implementing a universal, yet adaptive methodology for objectively evaluating the effectiveness of the compliance function. Financial compliance has evolved from a purely legal function to a strategic management element that directly influences the stability and investment attractiveness of a financial institution amidst globalization and increasing regulatory pressure. In the scientific field, there is a need to integrate disparate international standards (FATF, COSO) into a unified, holistic evaluation model. The article conducts a comparative analysis of compliance approaches in Ukraine and developed foreign countries, which revealed a significant gap between the reactive nature of Ukrainian compliance, focused on minimizing penalties, and the proactive foreign model, which is oriented towards strategic risk management and technological optimization (RegTech). Based on this analysis, the Integrated Model for Evaluating the Effectiveness of the Compliance Function is substantiated, combining conceptual frameworks (COSO, FATF, "Three Lines of Defense") with practical, technologically-oriented measurement tools – Key Risk Indicators (KRI) and Key Performance Indicators (KPI). In summary, the article argues that effective compliance requires a shift from formal to substantive adherence to requirements and the implementation of an integrated model. This approach provides financial institutions with tools for objectively measuring the performance of the compliance function, optimizing costs, focusing resources on highest risks (RBA), and enhancing competitiveness in the context of international integration. The experience of implementing such a model is crucial for the European integration of the Ukrainian financial sector.</jats:p>