News

Consumer protection is a top priority across the financial services industry and the focus on risk management and compliance is expected to continue in 2015 and beyond.

The president of the Federal Reserve Bank of New York recently stated, "There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives, or some other issues is difficult to judge, but it is another critical problem that needs to be addressed."

Risk management is not just a big-bank issue. According to Deloitte's 2015 Banking Outlook, regulatory attention is expected to flow down to small banks, making 2015 a more transformative year for these institutions.

Small financial institutions need to recruit additional specialised risk and compliance talent to meet heightened expectations. But this is just small-picture thinking and being appropriately resourced with staff and technology only ensures there are no gaps.

According to Deloitte, significant risk-based decisions are made throughout financial organisations on a daily basis. Risk management should not just be a periodic compliance activity. Instead, risk-intelligent behaviour should be weaved into the fabric of a company's culture.

Deloitte advocates that financial organisations should reinforce a strong "tone at the top" by cascading targeted messages down through each function and business line. Employees should take responsibility for risk management and compliance at an individual level and this should be reflected in performance management programmes and reinforced in employee training.

Source:
Deloitte, "2015 Banking Outlook Boosting Profitability Amidst new Challenges".