Conduct Risk
The FCA focuses on good customer outcomes and how a firm achieves this through staff conduct at all levels of the business. Conduct Risk is a keystone of regulation.
Conduct Risk refers to the risk of an individual or financial firm behaving in a way that negatively impacts market competition, causes detriment to a customer or reputational damage to the business.
Our Conduct Risk Course explains the FCA's approach to Conduct Risk as well as how to recognise and manage conduct risks in daily operations.
- 50 Minutes
- All staff
- Based on UK legislation, but suitable for global audiences upon the removal of UK-specific references and translation as necessary.
- FCA Compliance Library, Insurance Compliance Library
Learning objectives
- Recognise what Conduct Risk is and the complexity of managing it
- Recognise the Firm's commitment to properly conduct all aspects of our relationship with our customers
- Understand how we manage Conduct Risk in our business
- Understand your responsibility to ensure proper conduct
What can you expect your employees to learn?
Welcome
What is Conduct Risk?
The Financial Conduct Authority (FCA)
- The FCA's approach
- The FCA's objectives
- Exercise: What do you think?
- What is Conduct Risk?
- Conduct Risk issues
- Principle versus risk-based regulation
- The FCA's 11 Principles for Business
How is Conduct Risk defined?
- How we manage 'Conduct Risk'
- Exercise: Risk effects
Conduct Risk's 9 Key Drivers
- Group 1 - Inherent Risks
- How do we deal with Inherent Risks?
- Group 2 - Structure & Behaviours
- How do we deal with Structural & Behavioural Risks?
- Group 3 - Environmental
- How do we deal with Environmental Risks?
- Exercise: Categorise the risks
Conduct Risk - the FCA's expectations
- What does this mean in practice?
- The focus of Conduct Risk
- What does this mean for us in practice?
- You make the call: Is it expected of us by the FCA?
Conduct Risk and our business
- Mitigating risks
- Exercise: Mitigating risks
Corporate culture
- Measures against Conduct Risk
- The top-down approach
- Senior team responsibilities
- How do we achieve this?
- Scenario: Is this a good Conduct Risk culture?
Good business practice
- The cornerstones of good business practice
Corporate Governance
- Executive & non-executive involvement
- Conduct Risk implications
- How do we demonstrate effective Corporate Governance?
- Systems & Controls
- Examples of Systems & Controls
- Demonstrating effective Systems & Controls
- Scenario: Conduct Risk mitigation
- Our own Systems & Controls
- Effective risk management
- Benefits of good business practice
Conduct Risk & the 'Customer Journey'
- Conduct Risk versus TCF
- Exercise: Conduct Risk or TCF?
Product Design & Governance
- Product approval - new firm responsibilities
- Questions at the Product Design stage
- Product Design evaluation
- Our Product Design & Governance
- Scenario: Product design
Disclosures, Terms & Conditions
- Actions to mitigate Conduct Risk
- Our Disclosures, Terms & Conditions
- Exercise: Disclosures, Terms & Conditions
Sales
- We are all responsible
- Avoiding mis-selling
- How we sell
- Scenario: Effective Conduct Risk mitigation
'It does what it says on the tin' - After-sales service & transaction handling
- Dealing with mistakes
- After-sales service & transaction handling
- Scenario: After-sales Conduct Risk mitigation
- Conduct Risk - Example 1
- Conduct Risk - Example 2
- Conduct Risk - Example 3
- Conduct Risk - Example 4
Summary
Affirmation
Assessment
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