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Making strides in financial services risk management - Compensation - EY - Global

Making strides in financial services risk management


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“We are walking a fine line between being compliant without being so much on the leading edge as to make us uncompetitive.” – Survey respondent

Most banks reported progress in institutionalizing the risk culture by a host of new policies, systems and processes.

Banks are formally aligning compensation with actual performance, such as through adding more rigorous risk-based measures to scorecards. They're also moving to longer vesting periods, and increasing deferred compensation.

Yet, banks face many challenges on this front, particularly from regulatory uncertainty, competitive pressure, metrics, and even the bank's own culture. Respondents report feeling pressure to balance regulatory compliance with the need to attract and retain top talent.

Compensation revision

Additionally, revising compensation policies represents a significant cultural shift for many organizations and presents a challenge for change management.

Challenges to changing remuneration

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