Changing financial services firms’ behaviour through a duty of care

Iris H.-Y. Chiu and Alan Brener

Journal of Financial Compliance, 2019, vol. 3, issue 1, 67-75

Abstract: There have been a number of calls for regulators to impose a new and higher duty of care on regulated firms. These calls are evidence of a continuing mistrust of the financial services industry. The remedy largely rests in the hands of the latter to demonstrate that it is worthy of trust. The new duty of care will not achieve the aims of those that seek a significant improvement in the conduct of the industry. What is sought by all is a change in culture. This paper looks at the practical steps that a regulated firm can take to demonstrate its adherence to both the letter and spirit of financial services regulation and those specifically aimed at addressing cultural change. These actions include firms focusing on their strategy and business model and who, and how, they employ people and operate their processes. This includes the regulatory Senior Managers and Certified Persons Regime. It also includes steps to measure culture and emphasises the importance of avoiding self-deception.

Keywords: culture; duty of care; regulatory compliance; treating customers fairly; senior managers; certified persons; gatekeepers (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2019:v:3:i:1:p:67-75

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