Scope and Ownership within the Business

Victoria Stubbs

Some firms’ cultures, processes and products have been designed to enable them to profit from consumer errors and to exploit their superior access to, or understanding of, information on financial products and services. This can mean that the consumer may not be getting what they need and that firms do not act in the consumers’ best interests, eg, where incentives are designed to promote the short-term interests of the firms rather than the long-term interests of the consumer.

Financial Conduct Authority “Conduct Risk Outlook 2013”

In this chapter we shall discuss:

    • the business model, looking at both the impact of the business model on conduct risk management and the impact conduct risk can have on the business model;
    • reducing complexity and introducing conduct risk management into the business model;
    • ownership of conduct risk within the business, focusing on responsibilities and accountabilities.

Financial Services Authority (2011) defined conduct risk as “the risk that firm behaviour will result in poor outcomes for customers”. Conduct risk evolved in many ways from the FSA work on treating customers fairly (TCF). Following the financial crisis i

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