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Managing conduct risk during a pandemic
Journal of Financial Compliance,
4
(3),
202-209
(2021)
Abstract
The coronavirus pandemic (COVID-19) has drastically altered the operating model of almost all financial services firms, and staff are operating through a period of heightened stress. This paper discusses how firms need to ensure they respond rapidly to the changes to the external environment. The paper analyses how, while firms will need to update the risk-management basics of risk and control registers and second line of defence monitoring, the key driver to ensuring that conduct risk is well managed will be culture. It discusses how the Board will play a crucial role in ensuring that the desired customer outcomes are met as well as supporting all staff through this period. Regulators will be challenging firms as to how they have met the expected standards and remained within risk appetite. Culture will be a key factor in ensuring that firms continue to look after the interests of their customers.
Keywords: conduct risk; pandemic; culture; risk management; board oversight; COVID-19
The full article is available to subscribers to the journal.
Author's Biography
Victoria Stubbs is the Chief Risk Officer at The Cambridge Building Society and currently Deputy Chair of the Prudential Regulation Authority Practitioner Panel. Victoria is an experienced risk professional and has spoken widely on conduct risk. She was also awarded Special Award for Outstanding Chief Risk Officer at the Credit Awards in 2019. Victoria started her career at the Bank of England and has worked in retail banking and insurance, as well as returning to the Financial Services Authority, working on projects including Payment Protection Insurance and supervising large banks. She was also published in Risk Books’ Conduct Risk, with a chapter on Scope and Ownership in the business. Victoria is also a Nonexecutive Director in the education sector.
