Culture Audit in Financial Services

Reporting on Behaviour to Conduct Regulators

Edition: 1 Date: 03/06/2021 Price: £49.99 ISBN Paperback: 9781789667752 ISBN Ebook: 9781789667769 Pages: 448 Format (mm): 230x165 Product Category: Professional Subject: Banking

Author Information

Dr Roger Miles researches behavioural risk and the impacts of conduct regulation. He is Head of Faculty for UK Finance’s Conduct and Culture Academy, an industry-wide initiative which gathers, establishes and disseminates ‘best practice’ in the measurement and regulatory reporting of human-factor risks. He counsels Boards on human risk factors and uncertainty, delivers bespoke risk workshops for leadership groups in a variety of sectors, and is regularly called upon to liaise with professional groups internationally. « Offers clear, practical guidance on how to assess conduct and culture for internal governance purposes, to report to regulators and to evidence success to stakeholders « Examines what behavioural regulators around the world really want using examples from the front line of conduct reporting « Explains the key features of well-designed conduct and culture reports, and how the practice of culture audit differs from conventional auditing « Addresses practitioner concerns that their current reporting and MI tools will not be able to meet as-yet unclear regulatory expectations « Benefits from the author’s work with a variety of financial firms in conduct-regulated markets, his direct access to regulators, and a range of international contributing chapter authors

Description

In the next wave of conduct regulation in financial markets, from 2021 conduct regulators in the UK and elsewhere expect firms to produce evidence on how they are improving behaviour and culture. Facing this, many practitioners are anxious that their current reporting and management information (MI) are irrelevant to meeting as-yet unclear regulatory expectations.

This book provides the insights and tools firms need to report on culture, securing both enhanced business value and the regulator’s approval. Culture is now seen as a key contributor to good governance, feeding into existing discourse on environmental, social and governance (ESG) factors and the emerging dialogue on ‘non-financial (mis)conduct’, but conventional measures of business quality are unfit for the new reporting agenda. Culture Audit in Financial Services follows the arc of ‘behavioural regulation’ to examine what the regulator really wants, before offering guidance on how culture audit differs from conventional auditing, how to put the latest pure-research findings to work, and the key features of well-designed conduct and culture reports.

Written by an impartial author and a variety of contributors with extensive experience working with practitioners, regulators, and many of the world’s finest academic initiatives, this book is filled with practical, grounded advice on how best to approach this new challenge and avoid infractions.

Table of Contents

1 A culture quest for ‘better behaviour 2 ‘How regulators’ ‘behavioural approach’ went global – with culture its latest focus 3 ‘The house is on fire - How regulators own research has pointed to ‘culture reset’ 4 What’s the big idea? (1) -

How conduct regulators use behavioural science

1 Interlude One: From poacher to gamekeeper to poacher… to scientist - A supervisor’s tale

2 What’s the big idea? (2) -

Regulators’ challenge to firms - framing ‘purposeful culture’ 3 A ‘behaviour-at-risk’ agenda emerges - Questioning purpose, lost trust and cultural coercion 4 The new mindset and language of culture -

Assessing financial and nonfinancial conduct 5 Audit basics - How the practice of culture audit differs from conventional auditing 6 The new management reporting information (MI) for culture Part 1 - Getting past the old MI 7 The new reporting Part 2 - Developing the framework - from culture models to better questions and indicators

2 Interlude Two: Case example - Culture rating in a retail bank

3 Interventions and enforcements - How regulators have responded to a ‘culture crisis’ 4 Intelligence gathering versus surveillance - Tried and failed methods; putting the latest research tools to work

3 Interlude Three: A sector-wide group seeks culture ‘tells’ - (Observing indications of good and poor conduct)

4 Putting respected research tools to work, example 1 - Tools for cultural transformation - Barrett

Analytics 5 Putting respected research tools to work, example 2 - Using the CultureScope

‘combined analytic’ to deliver measurably better culture 6 What regulators really want -

Wrap-up and look ahead 7 Glossary 8 Recommended reading