Financial Crime Risk Management

CASE STUDY

FINANCIAL CRIME RISK MANAGEMENT

Embedding Behavioural Change in Financial Crime Risk Management (FCRM)

Nick Taylor worked with a major international bank to address a requirement from their regulators to affect cultural change in their approach to FCRM. After 5 years this all-encompassing strategic cultural change initiative was evidenced and embedded at individual, collective and organisational level.

Requirement:

This major international bank was required by their regulators to change their cultural approach to how they identified, measured and managed financial crime risk.

Regulators globally, are driving for a stepped change in individual, collective and organisational behaviours
They expect Financial Crime Risk to be properly considered in all business decision making
Behavioural change is a critical deliverable in any financial crime risk management transformation

Solution:

We defined cultural change as Awareness, Capabilities and Behaviours. We designed and executed a cohesive and coherent end to end approach including:

Leadership & Governance

Current state diagnostic and agreement of key behavioural goals (What good looks like)
Definition of key roles & responsibilities for first, second and third line
dentification of priority high risk/high impact roles
A broad template on how FCRM should fit into overall Bank Risk Management Framework
Agreement of key metrics

Communications

Develop a key thematic narrative to underpin all internal and external messaging. “What are we doing and why?”
Develop a multi-faceted, multi-media communications plan to ensure consistent application and reinforcement of that narrative
Includes Tone from the Top and Regulatory dialogue

Education

Learning Needs Analysis
A Learning Plan to address awareness, capabilities and behaviours. A multi- faceted approach covering both generic and role specific requirements
FCRM eLearning has minimal impact on behavioural change , therefore education typically included face to face learning interventions including Board level & C Suite coaching, senior leadership seminars, role specific training for high risk/high impact employees
Supporting blended elements of the plan included films, podcasts, digital interactive learning

Incentivisation
A thorough review of all aspects of Incentivisation to ensure FCRM was embedded in the firms business decisioning including:

Scorecards
Performance Measurement and Management
Compensation (variable awards and relative levels across first, second and third line)
Recruitment
Career paths and planning

Measurement & Assurance

It is important yet challenging to be able to demonstrate real behavioural change, and also to ensure that change is embedded such that behaviours don’t revert when the programme has ended.

Regular testing and assurance using the behavioural goals, MI and Metrics (outlined in Governance)
Results need to be included in the evolving communications narrative, particularly to the Regulator

Outcome:

The development and application of the new strategic cultural approach to FRCM took 5 years.
It was rigorously tested by US and U.K. Regulators. These changes were evidenced and embedded at individual, collective and organisational level.

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