State of Employee Conduct Management and Policy Governance


We’d like to invite senior compliance, risk and ethics officers at large banks and financial services firms to an upcoming roundtable to discuss best practices in employee conduct management and policy governance. These informative, free events will be hosted by internationally renowned GRC expert Michael Rasmussen.

Register for an event near you:

New York City | Thursday, September 19 | 3:00 PM – 6:00 PM EDT | Register Now

Charlotte, NC | Tuesday, October 8 | 3:00 PM – 6:00 PM EDT | Register Now

Leading the way for change: Creating a culture of compliance

Upholding ethical standards and creating a culture of compliance has never been more important for U.S. banks, yet there continues to be headlines about ethical missteps.

According to Deloitte, banking and financial services is the least trusted sector globally. Meanwhile, since the financial crisis, banks have paid hundreds of millions of dollars in conduct-related fines. Cultivating good conduct and culture is crucial to winning back trust, satisfying customers, creating a sustainable business and improving the bottom line. Instilling a strong compliance culture and sales practice as well as conduct risk oversight is critical to engendering consumer trust and avoiding financial and reputational consequences.   

So how can financial institutions make sure they avoid potential ethics and compliance pitfalls? Organizations need to leverage technology that embeds internal process governance and enables oversight by compliance and risk stakeholders to drive accountability. Let’s take a look at some specific areas of sales practice and conduct risk management that banks should consider:

Advertising & Marketing Review: When we look at marketing and advertising as it relates to compliance, everything a bank states in customer communications must be properly vetted – whether it is in print, digital, or a face-to-face communication between a banker and a customer. Major U.S. regulatory agencies have cited sales practices and conduct as key areas of examination focus. Even a misstated word by a contact center employee, such as not disclosing all the required information about the terms of a loan, can be a compliance violation. Every item of printed material about a deposit product must include all of the disclosures required by multiple regulating agencies.

Further, disparate subcultures within an organization can have different – or even competing – attitudes when it comes to marketing promotions. This is why advertising and marketing practices need to be systematized in order to ensure that sales and marketing campaigns are launched compliantly.

Approvals, Disclosures & Attestation Management: Everyone must be aware of their ethical obligations as they pertain to their individual role; some have higher levels of compliance accountability than others. Employees must receive the appropriate approvals for a wide range of specific conduct, such as instances where gifts and entertainment are involved; personal trading; outside business activities; as well as making sure that individuals in certain roles (such as those selling securities products) are making the needed disclosures as required by the bank’s code of conduct and regulatory requirements.  

Technology can play a key role in routing approvals for such actions by systematizing processes pertaining to employee accountability and oversight of that accountability.

Even the slightest detail falling through the cracks could spell significant consequences for the bank.  Institutionalizing the process of obtaining approvals by incorporating workflow technology to route requests for approval, in a defined sequence, to the proper stakeholders is critical.

Attestations should also be automatically captured, recorded and stored to serve as a “single source of truth” for all employee approval requests and self-reported conduct. These records should be easily accessible in order to be responsive to regulator requests and examinations.

Audit trails are also an important byproduct of technology. These enable the bank to provide documentation to regulators and other stakeholders, further demonstrating a strong commitment to an ethical and compliance-driven culture.

Compliance surveys:  Self-assessment plays a key role in managing conduct risk. All personnel must demonstrate that they are aware of and complying with the institution’s code of conduct. This can be done with the use of both role-specific and organization-wide compliance surveys. 

Manual data-gathering around such surveys can be inefficient and prone to gaps; but utilizing technology that automates data collection, as well as analysis and reporting, ensures that there is always a clear view – and audit trail –  of all disclosures and “read and understood” attestations. Further, compliance officers can use this data to identify potential areas of conduct risk and prioritize remediation.

Policies and Procedures Management. Since the regulatory landscape is always changing, bank policies and procedures are frequently updated to reflect those changes. But relying on a manual process for creating, approving, managing and distributing policy updates can be fraught with risk. Knowing every employee, their role, what policies they must follow, and what their responsibilities are, can be a difficult task. Take branch policies, for example; everyone from tellers, to mortgage specialists to managers and all others working in a branch must understand the policies that pertain to their specific role in the branch and abide by them.

Managing policies and procedures in a centralized manner will ensure a single, consistent, and current set of policies and procedures throughout the bank. And, distributing those policies and procedures on a role-specific basis, greatly increases the opportunity for adherence.  Compliance officers can also rest easy knowing attestations have been collected from every employee for every policy or policy manual that was received.

At RegEd, we have focused on developing bank-purposed enterprise compliance technology that addresses critical sales practices, conflicts of interest and other code of conduct requirements including marketing and advertising review, organization-wide compliance surveys, approval, disclosure and attestation management solutions and policies management tools.

Don’t forget to register

These are just a few pressing items that are dominating the compliance space. Interested in learning more about the latest trends, challenges and operational best practices? Don’t forget toregister for an upcoming roundtable and the opportunity to network with like-minded compliance professionals.

Register for an event near you:

New York City | Thursday, September 19 | 3:00 PM – 6:00 PM EDT | Register Now

Charlotte, NC | Tuesday, October 8 | 3:00 PM – 6:00 PM EDT | Register Now

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