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3D Window Office - 50428

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on 21 April 2016

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Transcript of 3D Window Office - 50428

Prezzip - Official Prezi Expert - Prezi templates & Prezi Custom Design
Conduct Risk
& more time for
Conduct risk is any action of an individual financial institution that leads to customer detriment or negatively impacts market stability.’ [Philip Cooper, BBA Conduct Risk Seminar, Sept 2012]

‘the risk that firm behaviour will result in poor outcomes for customers’ [FSA, 2011]
What is Conduct Risk
We define it as..."the risk of unfair outcomes to the end customer"
Any Questions??
Business Risk Review
Future Landscape:

Technological developments may outstrip firms’ investment, consumer capabilities and regulatory response

Vulnerable Customers

Large back-books may lead firms to act against their existing customers’ best interests

Retirement income products and distribution may deliver poor consumer outcomes

The growth of consumer credit may lead to unaffordable debt

This prezi template and more inspiration at:

Royal London Office
3D Background
Our goal is to provide our customers and members with better outcomes than our peers.

As such we have no appetite to:

Break promises or not meet the reasonable expectations.
Provide materially inaccurate information.

If these occurs we will take all reasonable steps to remedy our customers, members, intermediaries and partners in a fair, open and transparent manner.

James Harrison
Best Conduct Risk Manager 2015
Sources of Conduct Risk:


Biases, rules of thumb and mental shortcuts
The growing importanc eof financial capability
Information asymmetries


Policy and Regulatory
Economic and market

Structures and business conduct

Ineffective Competition
Culture and incentives
Conflicts of interest
Jobs To Do

Have a properly implemented customer centric strategy, which produces sustainable profits.

Have a board-led culture which supports that strategy and good consumer outcomes.

Develop products that operate in the interests of customers, and use behavioural techniques to ensure that those customers also understand them.

Take a prospective view on the products that you sell, stress-testing and ensuring appropriateness for your customers.
FCA Objectives

Strategic Objective:

Ensure that the relevant markets function well.

Operational Objectives:

To secure an appropriate degree of protection for consumers.

To protect and enhance the integrity of the UK financial system.

To promote effective competition in the interests of consumers.
Conduct Risk Scorecard
Royal London's Current Approach

At Royal London we want our customers to think of us as the company they can really trust and would recommend

In order to be this, we need to deliver what our customers value

By analysing customer research we have identified the areas which matter most to the customer: these are our Customer Value Statements

Ray: James, can you do a presentation on Conduct Risk?

James: Sorry, I'm washing my hair!

Royal London's Approach 2016

In line with our overall strategy we have developed Customer Value Statement focused conduct risks with key risks identified for each CVS and measured across the group.

Each CVS owner will own these risks and identify controls across the business and we will ensure that associated controls are assessed within functions on a quarterly basis.
We also need to avoid any unfair outcomes to our customers (conduct risk) – the CVS help us to understand the risks we face from unfair outcomes

We are committed to delivering these customer outcomes. We have shared the CVS with the FCA, as a demonstration of our commitment to putting the customer at the heart of our business

The Model is overseen by the Customer Standards Committee (CSC), which includes Phil Loney.
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