Duty of Care: from must to accelerator?
Get in the driver’s seat regarding your Duty of Care obligations
A complex and fast changing environment creates an increasing amount of challenges for financial institutions. One of those challenges is how institutions can meet their Duty of Care obligations. Financial institutions are expected to act in the best interest of their clients. These obligations however are extensive, complex and subject to changing demands of regulators and society. To be compliant with Duty of Care standards can prove to be a real challenge. To not be confronted with unforeseen Duty of Care issues, financial institutions should get in the driver’s seat.
Complying with Duty of Care standards
Among corporate responsibility standards are the Duty of Care standards. These are based on public society and regulators’ expectations that financial institutions must have a ‘client-central’ focus. For financial institutions this means that they are expected to act in the best interest of their clients and make the right decisions for them in all circumstances. By not following the Duty of Care standards correctly, financial institutions expose themselves to reputational and financial damage. Recent cases such as Interest Rate Derivatives, Investment based Insurance products and Interest-only mortgages show that institutions still struggle with handling and solving Duty of Care related issues. This is also due to the fact that regulators and society keep on changing Duty of Care standards, making it difficult for financial institutions to comply.
To stay ahead of regulatory discussions, financial institutions should be in the driver’s seat of their Duty of Care obligations. The first step is to gain insight into the vulnerabilities regarding Duty of Care obligations so financial institutions can develop a well-considered approach.
Deloitte’s Duty of Care Solution
Deloitte can assist financial institutions in analyzing changes in Duty of Care standards and to adapt to them as well. One of the Duty of Care solutions that Deloitte offers is de Duty of Care Risk Assessment. This risk assessment is based upon the SIRA methodology. This methodology, combined with data analytics, gives a full insight in the Duty of Care risks that are related to an organizations product and client portfolio and enables the organization to act upon these risks in a timely and adequate manner. The risk assessment can be performed according to the wishes of financial institutions: from all portfolios within the organization, to one product only.
Advantages that can be reached
Outlined are some advantages that can be reached by executing the Duty of Care Risk Assessment for an organization:
- Insight in your specific Duty of Care vulnerabilities
- Perform targeted activities; there where most needed
- Generating management reports on Duty of Care risks
- Anticipate in time on Duty of Care related challenges
Want to know more?
Want to know more about Deloitte’s Duty of Care Solution and find out how we can help you with your specific challenges? Please contact Martin Eleveld, Hassan Bettani or Wendy Brink - den Nieuwenboer via the contact details below.