The FSCA received an explicit mandate to regulate culture and conduct under the Financial Sector Regulation Act of 2018 and under a 2019 statement supporting a new draft of Conduct Standards.1 The FSCA had identified that, over the past decade, a “clear gap in the regulation of market conduct”2 of retail banks had become apparent. Under the new standards, in part driven given by recommendations from a 2017 World Bank diagnostic report,3 banks will be expected to demonstrate the design and use of governance arrangements which ensure that fair treatment of customers is central to the firm’s culture, and that customers receive consistently delivered outcomes.4
The FSCA’s approach aims to pre-empt the emerging risks within a bank and those which may exist at an industry level. Such risks will be relayed to the FSCA through a new reporting framework, permitting supervisors to gather and analyze information that reveals conduct risks and trends at any particular bank. This framework may develop into a more comprehensive market conduct framework over time.
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