The Necessity of Proactive Management

Experts at applied behavioral science technology company Starling offer insights into the failures of current approaches to managing conduct risk and explore an alternative – more proactive – solution. This would mark a paradigm shift in management science – one in which culture is viewed as an emergent property of group dynamics.

Despite punitive regulatory fines levied against banks over the last decade, which are estimated to exceed $320 billion, conduct-driven scandals continue to plague the industry. Regulators are under pressure to address persistent and seemingly systemic failures of conduct risk management even as banks struggle to contend with increased regulatory burdens, reporting requirements, capital charges to underwrite operational risk and mushrooming governance, risk and compliance (GRC) costs. These overheads are now said to make up some 20 percent of the day-to-day operational cost base at most financial services firms.

Businesses and regulators alike are eager to identify more cost-efficient and effective means by which to manage — and supervise — conduct risk. Organisational culture is at the centre of their current focus.

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https://www.corporatecomplianceinsights.com/a-copernican-revolution-in-culture-and-conduct-risk-management/