Conduct Risk Management: Using a Behavioural Approach to Protect Your Board and Financial Services Business

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Kogan Page Publishers, Jan 3, 2017 - Business & Economics - 312 pages

Conduct risk is at the core of behavioural regulation, a new approach to regulating financial services, whose new agencies and public prosecutors have spread rapidly across the world. Its prosecutors intervene assertively to challenge financial service providers to show clear evidence of a new customer-centric approach, which understands and responds to the hidden drivers of customer behaviour. They use their unprecedented powers to levy very large fines and even to imprison wrongdoers - often for not taking precautions rather than for any active wrongdoing. Conduct Risk Management is a tool for recognizing, acting on, and predicting conduct risk impacts in regulated business.

Conduct Risk Management sees beyond econometric and other 'box-ticking' traditions of risk management. Whilst protecting senior managers, it helps all staff to make positive use of conduct risk to promote behaviour the regulator will accept as 'good', as good behaviour is good business. The new conduct regulations personally affect every manager in financial services, and their suppliers, with new regulations making senior managers liable to imprisonment for failures in organizational conduct. Conduct Risk Management sets out plainly what practitioners need to know to understand the regulator's intentions, to prove compliance, protect competitiveness and maintain licence to operate.

 

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Contents

01 Time for a fresh approach
1
02 Behavioural science sets regulators thinking
23
03 The onset of financial conduct regulation
39
04 Why regulators had to change direction
63
05 The roots of misconduct
89
06 The politics of prosecution
109
07 Establishing what your good behaviour looks like
127
08 The behavioural lens Part 1
153
09 The behavioural lens Part 2
185
10 Looking back looking ahead
215
Glossary
237
Recomm ended reading with authors comments
271
Index
281
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About the author (2017)

Dr Roger Miles researches behavioural risk and the impacts of conduct regulation. He counsels Boards on human risk factors and uncertainty, and delivers bespoke risk workshops for leadership groups in government, NGOs and the professions. He teaches risk-related psychology at graduate schools including Cambridge University and the UK Defence Academy. He co-edits the LSE's annual Behavioural Economics Guide and publishes best practice guidance notes through professional bodies including British Bankers' Association (BBA), the Association of British Insurers (ABI), Global Association of Risk Professionals (GARP) and the Institute of Operational Risk (IOR).

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