Banking Sector in Ireland Urged to Prioritize Compliance and Risk Management Amidst Regulatory Crackdown
The Central Bank of Ireland has intensified its focus on conduct risk, culture, and consumer protection in recent years, following a string of misconduct cases at financial institutions. As a result, banks must adapt their compliance strategies to avoid regulatory action, fines, and reputational damage.
Conduct Risk: A Growing Concern
Conduct risk refers to any action that leads to consumer detriment or has an adverse effect on market stability or competition. The Central Bank’s enhanced Consumer Protection Code (CPC) and the introduction of a Consumer Protection Risk Assessment Model aim to improve supervisory approaches for regulated firms.
Regulatory Burden Increases
EU legislation, including the PRIIPs, MiFID II, EMIR, MCD, and IDD regulations, has also increased the regulatory burden on financial institutions. The Central Bank has warned that it will conduct more intrusive inspections to ensure compliance with these new requirements.
Importance of Effective Risk Management
A firm’s future success depends on its ability to effectively manage conduct risk and protect consumers. Failure to do so may result in regulatory action, fines, and reputational damage that can last for years beyond the event.
Organizational Culture and Accountability
There is a growing focus on organizational culture and accountability, following the Central Bank’s report on the behavior and culture of Irish retail banks in 2018. The regulator will introduce an Individual Accountability Framework to improve customer outcomes by enhancing accountability within organizations.
KPMG: Your Partner for Conduct Risk and Compliance
KPMG, a leading risk consulting firm, can help financial institutions transform regulatory compliance into a strategic business advantage. Our conduct risk and culture professionals provide guidance on:
- Regulatory expectations
- Design and implementation of comprehensive conduct risk frameworks
- Assessment of organizational readiness for inspections
- Support for internal audit functions
Training Programs for Risk Culture Awareness
We also offer training programs to raise awareness of risk culture at all levels, including:
- Identifying culture and behavior drivers
- Linking them to qualitative and quantitative metrics
- Raising awareness through tailored training programs
Our scientific culture model has been adopted by the Dutch National Bank, and our experts can help organizations assess their culture and behaviors, design a behaviors and culture framework, and roll out tailored training programs.
Partner of Choice for Compliance and Risk Management
With extensive experience across financial services industries, KPMG is the partner of choice for banks seeking to enhance their compliance and risk management strategies. Contact us today for guidance on conduct risk or culture in your business.