Integrating Culture into Root Cause Analysis

This Industry Practice Note outlines an extended Root Cause Analysis (RCA) process that incorporates cultural considerations to provide a more comprehensive understanding of risk-related incidents within banks. The document begins by defining RCA and its conventional focus on four areas: People, Processes, Systems, and External Factors. It emphasizes the importance of integrating culture into the RCA framework to identify underlying cultural issues that may contribute to incidents. The note details a structured RCA process consisting of eight steps, from defining the incident to monitoring results post-implementation. It also highlights key pillars necessary for effective integration of culture into RCA, such as strong risk awareness and effective problem handling. Furthermore, the document discusses scenarios in which culture integration is particularly relevant, including recurring issues and high-severity incidents. Lastly, it introduces a methodical framework for conducting a deeper analysis of incidents, aiming to uncover hidden cultural factors that may lead to more sustainable solutions.