In 2019 the FCA held a series of roundtable sessions with employees from 18 wholesale banks who together became known as the “Engine Room”. The report highlights the messages from these sessions.
The strongest message given is that staff are more skilled at identifying conduct risk in hindsight than in a rapidly unfolding situation and as a result the identification of conduct risk remains weak. The scale of operational changes that firms have had to undergo as a result of the COVID-19 pandemic has not only created new conduct risk challenges, it has also meant that well-known and generally well managed conduct risks have become more acute. Improving staff’s ability to identify new sources of conduct risk as they emerge in conjunction with improving the ability to make good mitigation decisions, especially in times of stress, is required.
The report emphasises the importance of a firm’s culture i.e. the habitual mindsets and behaviours that characterise an organisation including: how easily an employee feels that the day-to-day business decision making of the firm can be challenged; the continuing need for a strong tone from the top; and the need for strong middle management in firms.
In response to the ongoing challenges that firms face in assessing the current conduct and culture of their organisations, Insight Regulatory, in collaboration with Kaplan Performance Academy, have developed C-CAT.
C-CAT is a confidence-based tool that helps your firm identify and measure critical gaps between your employee’s confidence in their own conduct as compared to the required standards of the firm. In other words, what they do versus what they think they should do. C-CAT is a unique tool which helps the senior management in firms identify the knowledge, skills, attitudes and behaviours that help or hinder a positive culture around conduct.
Please click on the link below to understand how C-CAT works: