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3D Window Office - 50428
Transcript of 3D Window Office - 50428
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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"
Business Risk Review
Technological developments may outstrip firms’ investment, consumer capabilities and regulatory response
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
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.
Best Conduct Risk Manager 2015
Sources of Conduct Risk:
Biases, rules of thumb and mental shortcuts
The growing importanc eof financial capability
Policy and Regulatory
Economic and market
Structures and business conduct
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.
Ensure that the relevant markets function well.
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.