Data Driven Approach to Managing Culture and Conduct Risk

This document is an Industry Practice Note that outlines a data-driven approach to managing culture and conduct risk within banks. It builds upon a previous publication on Culture and Conduct Dashboards, providing guidance on good practices for banks to enhance their culture and conduct agenda. The document emphasizes the importance of using both leading and lagging indicators to monitor culture and conduct risks effectively. Leading indicators offer predictive insights, while lagging indicators provide retrospective analysis of past events. Various use cases are presented, illustrating how banks can utilize data to identify potential risks, such as misconduct, toxic workplace culture, and regulatory breaches. The document encourages banks to adopt innovative data analytics techniques for predictive analysis, highlighting the significance of employee sentiment and customer feedback in understanding and improving organizational culture. By implementing these practices, banks can proactively address issues and foster a positive conduct environment.