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Accountability is a theme that has been on the industry’s to do list since the Great Financial Crisis.
Five years since new senior management regimes started rolling out, global regulators are already raising the bar to include front-office culture audits which apply behavioural science to new culture and conduct measurement.
New JWG research shows the UK has taken a leading role in senior management accountability rules. In 2016 the SM&CR which it pushed the obligations far beyond the US’ yates Memo and EU suitability guidelines. Since the UK regime was implemented, similar accountability regimes have been implemented by other regulators (e.g., Australia’s BEAR, Hong Kong’s MIC and Ireland’s SEAR).
These regimes ask firms to identify who is responsible for what, name accountable individuals to the regulator and prove that they are managing accountability.
This leaves a complex and confusing landscape for senior managers doing business across borders. Accountability and governance rules are not like trading obligations where the transactions need to align to avoid a trade break. Rather, they provide an umbrella framework of systems and controls which are very easy for the supervisor to fault with from the rear-view mirror.
This quarter, JWG research has shown that governance topics are dominating the regulatory dialogue globally and new obligations covering diversity, remuneration and suitability testing are causing governance themes to outstrip even data and top RegDelta’s charts with an uptick of 23% last month.
In an increasingly digital sector with divergent rule sets, the ability to manage the compliance deltas is fast becoming a critical differentiator for senior management seeking to offer financial products and services across borders.
In this episode, Dr. Roger Miles and Elizabeth Arzadon both authors of the definitive Culture Audit book (http://www.koganpage.com/cafs) join forces with RegTech expert Alan Blanchard and legal thought leader, Sam Tyfield to explain the key digital insights required for senior management and Compliance to pass the new test.
Modelling behavioural norms and expected outcomes is difficult for analogue tooling, but the good news is that it more cost-effective to adopt the new RegTech methods required. A ‘no brainer’, really.
Additional resources:
- To join JWG’s Trade Surveillance SIG, email Corrina
- To debate this topic, join JWG’s LinkedIn community here.
- To create your own JWG RegTech Hub sign-up here.
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Please feel free to subscribe and contact Corrina.stokes@jwg-it.eu with any feedback or if you would like to contribute to future episodes.