Conduct Risk framework: industry trends and challenges

This document intends to provide an overview of the main components of a successful Conduct Risk management framework, as well as the agents that shape them.

Section 2 contains an overview of those components and how they are related to one another. A more descriptive summary is then provided for some elements, including Conduct Risk definition, organisational structure and functions, policies and procedures, risk appetite, etc.
Section 3 provides a more in-depth review of one of the factors that is proving especially difficult to tackle, i.e. that of Conduct Risk effective identification and measurement. This section explores the classical approach to Risk measurement, adapted to Conduct Risk (Risk Appetite, Control model, Risk and Control Self-Assessment, Risk Metrics etc…). In addition, it provides insight on how new technology and new techniques (including Big Data and Advanced Data Analytics) can be used to explore non-obvious potential Conduct Risks in a forward looking, proactive way.