Regulatory action leads firms to turn away business

The risks of personal liability could be affecting the strategic business decisions of executives in asset management and other financial firms, according to a survey of compliance and risk practitioners.

Almost a third of respondents (29%) said that their firms had turned away potentially profitable business opportunities due to culture or conduct risk concerns.

The ‘Thomson Reuters Culture and Conduct Risk 2017’ survey found that actions by regulators worldwide were changing the behaviour of decision-makers at asset management firms, banks, brokerages and insurance companies.

A majority, 77%, said that they take conduct risk factors into consideration when determining business strategy.

Within the banking sector, the study concluded that there was a direct correlation between bank culture and conduct risk, as well as with the steps firms take to change culture and mitigate risk.

“Our annual survey provides insight into industry thinking and emerging best practices, as well as regulatory expectations,” said co-author Stacey English of Thomson Reuters.

“The frank concerns and views shared by participants reinforce challenges their peers face in all financial services sectors.

“Neither culture nor conduct risk are new concepts but this year’s survey emphasises how both remain at the top of firms’ and regulators’ priorities, directly impacting strategy as they face greater prospects of personal liability.”

©2017 funds europe

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