Culture in financial services
Scrutiny by the regulator, in principle and in practice
Senior regulators globally have emphasised the necessity of establishing the right culture within financial services firms. But it is much less clear how front line supervisors assess the culture of a firm and reach decisions on whether any problems identified are sufficient to justify intervention.
We have prepared a report in which we describe how supervisors are likely to approach this complicated task identifying six areas that we expect to attract particular scrutiny. We also provide examples of positive and negative indicators that could strongly influence supervisors’ ultimate judgement as to the culture of a firm and hence the strategy and resources they should deploy in supervising it.
Key focus areas for supervisors
|The “tone from the top”
The role of the leadership in setting, communicating and challenging the firm’s culture
|Purpose and strategy
A clear sense of purpose and alignment between strategy, culture and values
Enhanced individual accountability for specific roles and responsibilities
|Remuneration and incentives
Remuneration and incentives that promote good outcomes for the firm, customers and the market
|Governance and controls
A culture that reinforces good governance and controls
|Mindsets and behaviours
Mindsets and behaviours that reflect the firm’s target culture and values
As well as reviewing trends in regulatory thinking on culture, this report is intended to provide you with an understanding of the perspectives of
About the Centre for Regulatory Strategy, EMEA
The Deloitte Centre for Regulatory Strategy is a powerful resource of information and insight, designed to assist financial institutions manage the complexity and convergence of rapidly increasing new regulation.
With regional hubs in the Americas, Asia Pacific and EMEA, the Centre combines the strength of Deloitte’s regional and international network of experienced risk, regulatory, and industry professionals – including a deep roster of former regulators, industry specialists, and business advisers – with a rich understanding of the impact of regulations on business models and strategy.