Firms Seeking Clarity on Conduct Risk
Managing and mitigating conduct risk continues to be one of the highest regulatory priorities, yet financial services firms remain unclear about what conduct risk is and how to address it reports Thomson Reuters.
This lack of clarity, coupled with recent regulatory actions, appear to be driving concern about personal liability consequences.
The Thomson Reuters ‘Conduct Risk Report 2014/15’ follows up on last year’s study by looking at what practical actions firms have taken and what changes and progress have been made over the past 12 months.
The results show an increased focus by regulators on the behaviour of firms and how they conduct their business. Firms have boosted the time and resources devoted to the management of conduct risk, yet there is still a significant gap between awareness and implementation of effective policies across a firm.
Thomson Reuters Accelus surveyed more than 200 compliance and risk practitioners from financial services firms across the Americas, Europe, Africa, Asia, Australia, and the Middle East to gain insight into how the industry is defining and responding to conduct risk. Respondents represented firms from across the financial services sector including banks, insurers, and fund managers.
Key findings from the report include:
“We’re seeing regulatory bodies all over the world strengthening their guidelines and enforcement when it comes to conduct risk,” said Andrew Neblett, managing director, enterprise risk management (ERM) at Thomson Reuters.
“Interest around conduct risk has grown significantly over the last year, and will continue to be a focus point for regulators throughout 2015. Financial firms are going to have to continue to take tangible steps towards managing and enforcing compliance processes or else they will be subject to steep penalties and fines.”
The full report may be accessed here.