From an industry perspective, there is likely to be continued convergence in how banks address these issues. First, it is increasingly acknowledged that there is a clear link between a healthy firm culture and successful business results. Additionally, no bank wants to become the next poster child for misconduct, as the reputational and financial risks can be devastating. Especially in an industry that relies on a “social license” to operate, the benefits of complying with (or staying ahead of) regulation is materially impactful.
Moreover, with a conflicting desire to reduce GRC spend and boost ROE, while at the same time reducing the liability exposure and headline risk that comes with conduct scandals, firms may be expected to focus on this issue at the level of the C-suite and boards.
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