DOHA: The conduct of financial institutions around the world is drawing more scrutiny from regulators and supervisors. Attention is increasingly focused on misconduct in both the wholesale and retail financial markets and the latest report in KPMG International’s Evolving Banking Regulation series, looks at the challenges for banks and other institutions arising from the regulatory, commercial and societal pressures to improve their culture, behaviour and standards of conduct.
“Globally, banks and other financial institutions are asking themselves fundamental questions about their desired culture and values, and how these are reflected across the entirety of their organisations,” said Giles Williams, EMA Financial Services Regulatory Center of Excellence lead, KPMG International.
In Qatar, we are seeing a similar trend, observed Omar Mahmood (pictured), Partner and Head of Financial Services for the Middle East and South Asia: “Our banking clients are frequently talking to us about how they can improve internal controls and governance. The local regulator has also been actively involved in ensuring adequate governance practices are followed and appropriate levels of consumer protection exists.”
The report reviews regulatory developments in the wholesale and retail financial markets and how they are targeting banks’ culture and behaviour, with a particular focus on greater transparency and consumer protection. In wholesale markets, the report takes note of the over arching theme of applying broad principles of governance and transparency to the world of wholesale market conduct. The combination of global standard setting and investigations across Europe, the US and Asia is spreading global standards across regions, albeit not always completely consistently.
On the retail side, international standard-setters, the EU and many national authorities have taken moves to strengthen consumer protection and increase transparency, with significant political pressure to deliver change. Across financial markets, regulators are looking to hold board members and senior management of firms directly responsible for establishing, maintaining and communicating their firms’ culture and values and for leading cultural and ethical change.
Mahmood continued: “in the light of rapidly changing economic landscape, there is a need to maintain public trust in banks and in the financial system in general. Forward thinking financial institutions are utilizing culture and behaviour best practices as a mean of establishing a competitive edge.”The Peninsula
