The Culture of Risk
The importance of managing conduct risk
Conduct risk cannot be pinpointed to a single function or business of a financial institution as it can run deep within the business and operating model if not addressed effectively.
Developing the conduct risk framework essentially deals with the following things:
• Identifying the various exposures to misconduct that the financial institution can express internally and externally.
• The channels and platforms across the three lines of defence of the firm in which poor behaviour can be expressed.
• The manner in which these risk exposures need to be addressed so as to ensure minimal-to-no form of gap identified across the operating model when dealing with conduct risk.