The FCA views culture in financial services as a key root cause of the major conduct failings that have occurred within the industry in recent history. Strong leadership, in conjunction with the concept of accountability, promotes good culture within firms. If culture is so crucial then it needs to be managed. If it needs to be managed, then it needs to be measured.
The challenge is two-fold: (i) Senior Managers (SMs) need to demonstrate that they are meeting their own regulatory obligations while minimising the administrative burden imposed by the UK Senior Managers and Certification Regime (SMCR), detailing and evidencing the reasonable steps that they undertake, whilst ensuring that the business activities for which they are responsible continue to promote a good culture without compromising profitability; and (ii) Measuring the conduct and culture of your firm to ensure that the behaviours and accountability of employees support the firm’s values, is crucial to developing an effective conduct risk strategy.
Insight have a two-pronged approach that assists SMs in meeting the challenges that they face:
C-CAT uses data-driven insights into culture and conduct gaps to analyse, prioritise and target the areas where change is needed, as well as providing a heat map which identifies, prioritises and targets development by providing detailed measurements regarding:
Underpinning each of these 5 factors are a series of competencies allowing SMs to develop the right conduct risk strategy for their organisations.
Adequately demonstrating that ongoing obligations are being met and that reasonable steps are being undertaken is essential to addressing the ongoing liabilities of SMs.
SMs must promote and develop a robust conduct risk strategy for the business activities for which they are ultimately accountable. That strategy must be purposeful and effective and therefore based on actual issues as opposed to perceived ones, using outward looking factors as opposed to solely relying on internal metrics such as breaches of personal account dealing rules or failing to complete training on a timely basis.
If you are an SM struggling under the administrative burden of SMCR contact one of our partners to arrange a demo or a free trial of Insight-Cerberus:
+44 (0)7811 371884
If you are a SM who wants to understand where the conduct and culture of your organisation currently sits, contact us to learn how C-CAT can give you the metrics that you need: