Looking at peers in the market will allow benchmarking and reflection if the company maintains the correct appetite, including the trends in the sector. As there is no one-size fits all within the financial services, the recent and future initiatives will depend upon the industry they are operating in, but as well on the circumstances in the market.
The shift in focus from principles to outcomes, makes conduct risk a very difficult topic for financial firms.
Redefining Risk Governance standardsIn the last financial crisis all financial institutions were facing severe impact from the reputational risk and are still struggling to put governance in place and they even have a different view on how their governance should look like.
Each firm should articulate the risk appetite by clearly defining the appropriate gains in doing business. This can be a very demanding exercise for most companies. If there are different business lines, an aggregated view will be necessary and timely reflection should be part of the company policy.
Within The Eurozone no clear initiatives have been noticed in that direction. The competent authorities are collecting information without giving feedback. As consultancy firm, we have insights that can be of great benefit to sail the right course.
Conduct risk can be seen as part of compliance but also interacting with other risk functions and customer services (sales force, commercial management, operations). In conduct risk more emphasis will be on corporate governance and senior management accountability and buy in from the middle management.