Following many well publicised misconduct issues within financial services, there is now a regulatory spotlight on the issue of conduct risk (in addition to all the fines) in an effort to help rebuild trust and support future growth.
The FCA broadly defines conduct risk as ‘any action of a regulated firm or individual that leads to customer detriment or has an adverse effect on market stability or effective competition’.
There are many aspects of an organisation’s business that are vulnerable to conduct risk, and that financial institutions need to be able to monitor and improve their conduct across multiple approaches.
Misconduct can come down to issues such as weak monitoring systems, conflicts of interest, disconnected business models, manual and complicated processes as well as poor accountability, problematic culture and misguided product lifecycle.
Regulators are now expecting firms to embed conduct risk management across the organisation. Regulations include the Senior Managers and Certification Regime (SMCR) in the UK; the EU Whistleblower Directive (read about it here); the SEC’s Rule 204A-1 (Code of Ethics Rule) and Foreign Corrupt Practices Act (FCPA) in the US; the MAS Conduct Guidelines and more.
RegTech Insight has collated a list of the top Conduct Risk solution providers to consider in 2022, based on our own research as well as entries to our RegTech Insight Awards Europe, Regtech Insight Awards USA and RegTech Insight Awards APAC.
Read the full article here!
