4. Address drivers of misconduct: Initiatives to improve industry culture and ethics can go so far but will have limited impact without a framework for accountability. The challenge for the conduct agenda is to move from setting the “tone from the top” to embedding positive culture and behavior throughout the organization.
The journey to better compliance
Banks need to manage and anticipate emerging risks. Digital transformation will help, but as our annual bank risk management survey highlights, risk managers must quicken the pace at which they embrace and deploy new technologies.
The demand for accountability is broadening in scope. Environmental, social and governance issues, and particularly the sustainable finance agenda, must become key elements in strategic planning and risk profiling. Change is essential, but it can, and should, be driven from the top.
At board level, greater diversity is becoming not just a regulatory expectation, but an operational necessity. Individuals whose knowledge extends beyond financial risks and regulation will be positioned to break down silos and inject deeper and broader corporate governance and risk oversight.
It’s time for management to deliver representative governance and risk frameworks that afford better alignment, improved data quality and new business models that enable sound market and customer outcomes. The aim is to get the right stakeholders to evaluate the risk implications on an end-to-end basis of operational, strategy and business decisions across the value chain, including the product life cycle, marketing, client segmentation, pricing and remuneration.
If boards and senior management become proactive about the future, build the right skills and develop new ways of working, they can deliver a more agile and efficient risk and compliance frameworks equipped with the latest technologies, enhanced governance frameworks and new roles with new skill sets.