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Contributions to the Supervisors on Supervision Stocktake
Should culture, and the conduct proclivities it may promote or discourage among employees, factor into supervisory engagements?
1.2.1a Many participants see culture as a precursor to misconduct and consumer harm, making it of key interest to conduct regulators.
“The fact that misconduct continues to occur all too frequently across financial institutions shows that more needs to be done.”
1.2.1c Still others see little distinction between cultural drivers of nonfinancial and financial risk, making it an area of interest to conduct and prudential regulators alike.
“The global financial community has made good progress in raising prudential standards, enhancing risk management, and strengthening controls. But reform of the financial industry — to make it safer and more purposeful — will not be complete until the industry ‘gets the culture right.’”
What tools, metrics, and data collection capabilities are currently available to support culture risk governance and supervision? What is working and what does this hold for the future?
3.2.1a Participants discussed the promise and the challenges that new technologies offer in culture risk supervision.
“The use of Suptech and predictive analytics, complemented by behavioural science, will equip supervisors with the necessary tools to examine and evaluate in a more systematic way what is commonly viewed as a nebulous area.”