Fewer than half of CROs surveyed by accountancy firm, Ernst and Young (EY) said their firm had a developed a clear risk conduct framework.
Regulators across Asia Pacific are turning their focus to conduct risk as they call time on the unevenness and variation of practices seen in businesses across the region.
Only 45% of insurance CROs surveyed by accountancy firm, Ernst and Young (EY) said their firm had a developed a clear risk conduct framework.
“The issue that CROs will battle with could be different and unexpected. In Asia, there is the prospect of more focus on market-consistent solvency frameworks, as regulators mature. Equally maturing regulations could mean that customer outcomes and fairness have become a key consideration for CROs, especially those responsible for compliance functions,” said one CRO anonymously in the report.
The EY report also said of APAC: “There are jurisdictions where elements of conduct risk are embedded in other regulations and jurisdictions where conduct risk has yet to emerge as a regulatory focus. However, a growing number of regulators in the region are seeking to understand the steps firms are taking to manage conduct risk.
“Many firms are also beginning to better define conduct risk and incorporate its considerations right across the employee life cycle: recruitment, performance assessment, training, incentives and remuneration. In many jurisdictions, there has been an emergence of formal conduct risk frameworks, with dedicated teams supporting a conduct risk program,” the report added.
The firm also predicts in Europe, where regulators have set high conduct risk management benchmarks, tend to have more advanced practices. Nonetheless, in 2018, we will continue to see an increased focus on conduct risk governance and measurement, frameworks, conflicts of interest, and people practices.