At RiskMinds International 2015, Rafael Gomes presented "What Does Good Risk Culture Actually Look Like?" and addressed risk culture and conduct in practice. Get more information from Rafael’s blog post, which describes how financial services can recognize, measure, and communicate good risk culture: http://bit.ly/1RFBrzF

1. Risk Culture and Conduct in Practice:
What does ‘good culture’ look like?
Rafael Gomes
Amsterdam, RiskMinds 2015

2. Good ‘Corporate
Governance’
In practice, our understanding of what comprises ‘good conduct and culture’
have grown exponentially
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1990s
2000s
2015
2010s
‘Treating
Customers Fairly’
• Personal
Accountability
• Product
Governance
• Measuring
Culture
• Speaking Up
(Whistle-
blowing)
• Vulnerable
Customers
• Complaints
• Social Media
• Conflicts of
Interest
• Digital Channels
• Market Conduct
• Conduct Risk
• Reputational
Risk
• Risk Culture
• Market Conduct
• Mis-selling and
Suitability
• Complaints

3. How we perceive culture is often distorted by popular myths
Myth Reality
• Behaviours develop in networks, not only in
individuals, and culture has to be worked.
• Past misconduct has sometimes been in
accordance with policies, norms or the
business model.
• Non-financial factors have a greater and
more sustainable effect on behaviour of
high earners.
• Cultural issues vary across financial services.
For example, mis-selling is not generally a
trading floor issue.
“We hire good people:
good culture and behaviours
should come naturally.”
“99% of our people behave
right; bad apples let us
down.”
“Sorting this out is all
about aligning compensation
and incentives.”
“It is only a problem on the
trading floor.”
4Copyright © 2015 Accenture All rights reserved.

4. Regulations are driving change in the practical ‘cultural frameworks’ within
financial services companies – new policies, responsibilities and controls
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2016 - 172015
UK
June:
Complaints
Handling
May:
MiFID II
January:
MiFID II
June: MiFID II
June:
SMR
May:
Whistle-
blowing
June: Whistle-
blowing
June: Fair and
Effective
Markets
September:
MiFID/MiFIR
March: SMR
March: SMR,
Certification
July: MAR
July: MiFID/
MiFIR
Q2: FCA investment
and corporate
banking market
study
EU
UK
UK
UK
UK
UK
UK
UK
Q2/Q3: FCA Culture Change
UK
Q3: Consumer Data
UK
Q1: Dark Pools
Product Governance
Conflicts of Interest
UK
EU
EU
EU
UK
UK
Whistleblowing
Market Conduct
Digital/Data
Pipeline of Conduct Regulations and Guidance in Europe – 2015-17
Personal Accountability
Complaints Handling
Key Themes:
Source: Accenture analysis based upon publicly
available documents, November 2015.
Glossary:
FCA: Financial Conduct Authority
MAR: Market Abuse Regulation
MiFID: Markets in Financial Instruments Directive
MiFIR: Markets in Financial Instruments Regulation
SMR: Senior Managers’ Regime

5. What does good culture look like?
1. Responding to the ‘spirit of the law’
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5
Adapters to Regulation (‘Letter of the Law’)
Transformational influence
Shapers of Standards (‘Spirit of the Law’)
Banks
RegulatorsTrusted Industry
Leader
Short-selling
Digital
Channels
Market
Abuse
Risk
Reporting
…
Examples

6. Employee
Business
Unit
Board and
CEO
Customer
What does good culture look like?
2. Identifying which touchpoints best influence behaviours and culture
Recruitment Reward and recognition
Capital allocation
Talent
management
Learning
Promotion and
succession
Shareholder
and Analyst
interactions
Board
diversity
Strategy
Marketing
Staff
attitude
Service value
and ROI
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7. Product
Governance
Committee
Business
Unit Exec.
Committee
Group
Compliance
or Risk
What does good culture look like?
3. Empowering people to make better decisions and take action
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Board
Conduct Data ‘Universe’
50-100 Indicators
Influence Groups
Start here!
Useful Conduct and Culture Indicators
Examples
% actual v forecast profitability, by product
Helpful
Unhelpful
% complaints for sales by robots v humans
% products sold in bundles
% employees rated as role models
Products w/ no alt’s for vulnerable customers
Culture
Products
Customers
Markets
Governance
% trade orders cancelled
Breaches by senior personnel
With qualitative input, this data turns to insight –
colour, root causes, exceptions, follow-up actions

8. Risk Culture and Conduct in Practice: What does ‘good culture’
look like?
8Copyright © 2015 Accenture All rights reserved.
Disclaimer:
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disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and
completeness of the information in this presentation and for any acts or omissions made based on such
information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible
for obtaining such advice from their own legal counsel or other licensed professionals.
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www.accenture.com/ConductandCulture
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