White Paper

The Future of Conduct Risk Monitoring at Asia-Pacific Financial Institutions

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Financial institutions are developing new capabilities for measuring conduct risk and assessing the effectiveness of culture change initiatives.

In recent years, initiatives to foster sound culture and deter misconduct have remained in focus for regulators and financial institutions alike. Culture reform initiatives, however, require a multi-pronged approach – one that considers governance arrangements, incentive systems and remuneration frameworks, staff training and development, and effective top-down and bottom-up communication.

In Singapore, Hong Kong and Australia, efforts are focused on developing new conduct risk metrics and monitoring approaches that can help to determine the effectiveness of culture reform initiatives in driving behavioural change. However, a ‘tick-box’ approach with an overreliance on manual checks is still common in areas where automation would yield better outcomes at a lower cost.

Download the white paper, co-authored by NICE Actimize and Regulation Asia, to find out the ongoing initiatives that Asia-Pacific banks are undertaking to reform bank culture and mitigate conduct risks, and the next steps planned by banks and regulators in the region. Specifically, the paper highlights efforts by banks to develop new metrics and leverage technology to enhance their ability to measure conduct risk levels across their organisations to facilitate culture improvements.

Develop new metrics

Leverage technology

Enhance ability to measure risk

There is a better chance that unusual employee behaviour can be detected in a timely manner if surveillance data are collected from different sources (e.g. email communications, call recordings, access logs for applications or databases storing customer or other confidential information, and leave records) and then amalgamated and considered in aggregate. – HKMA, Regtech Watch, September 2020