No matter how good we get at predicting the future we can never be certain what’s around the corner. The only certainty about the future is that there will be change. In the world of regulation, change often comes about in modified regulations, evolving customer behaviour and altered market conditions.
Whichever type of change firms are navigating, emerging conduct risks are a likelihood and managing them effectively is essential. Phil Deeks, Technical Director, provides three areas of focus for firms looking to effectively identify and manage emerging conduct risks in times of change:
- Foster a Positive, Customer-Centric Culture
Firms that effectively adapt to regulatory change tend to also have a positive and agile culture. Culture underpins the ways in which staff behave and those firms that cultivate a culture of flexibility and a positive, problem solving attitude amongst staff are more likely to bear change successfully. Having a culture that places the customer at the heart of all business decisions will also enable staff to react in a customer-centric manner when change requires alteration to policies and procedures, ultimately ensuring the continual delivery of positive customer outcomes despite potential upheaval.
- Don’t Disregard Data
In a world where data rules, firms have never had so much information at their fingertips. The key, in times of change, is ensuring that Management Information remains accurate and useful to senior management and continues to identify emerging risks. To provide value, MI should be collected from a range of sources, be comprehensive and acted upon quickly and decisively.
- Take Control of Governance
Robust governance is essential for all financial services companies and is never more important than in times of change and uncertainty. A robust governance structure should ensure that no matter what disruption is occurring at a structural level, decisions continue to be made in customers’ best interests. Maintaining governance will ensure senior management continue to have visibility of emerging issues and risks, enabling them to react proportionately and quickly.