An Overview of Conduct Risk
How Does Conduct Risk Manifest and What Are Its Root Causes?
What Are the Driving Forces of and Who Owns Conduct Risk?
Scope and Ownership within the Business
Conduct Risk in Financial Services: Lessons from the Hospitality and Leisure Industry
Ethical Culture: What, Why and How?
Language and Conduct Risk: Limited Language – Big Blind Spots
An Anthropological Perspective on Conduct Risk
Identifying and Measuring Conduct Risk
Risk Appetite Setting and Modelling Conduct Risk
The Effect of Conduct Risk Losses on Reputation
Bringing the Customer Back to the Foreground: The End of Conduct Risk?
Managing Conduct Risk
Closing Comments on the Future of Conduct Risk
Some would argue that conduct risk has been a hot topic ever since the Financial Services Authority (FSA) split into the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) in 2013 and the latter picked it up as its raison d’être. Actually, this is not correct and we shall come on to this assertion later on in the chapter. For now, however, let us pretend that this is the case and that it is regulation that has forced the hand of financial services.
However, there is a lot more to risk, risk management or, more specifically in this case, conduct risk and its management, than the whims of regulators. When you peel away the various layers and the associated noise and protestations that come with regulation, you will see that the case for conduct risk and its management is actually business led. The regulatory angle is merely one dimension or, dare I say, a by-product of the actual driving force.
“New” risk categories emerge from time to time, whether at the higher risk level and therefore more infrequently (such as operational risk as “conceived” by the Basel Committee on Banking Supervision) or at the lower level (such as cyber risk). Conduct risk is a