‘Criminalized’ compliance may backfire in quest for better Wall Street cultures

Very interesting and thoughtful article distributed on Reuters regarding the state of bank regulatory culture. Banks have designed their compliance programs as extensions of the regulators that oversee their operations. In other words, they’ve in-sourced enforcement functions – creating a culture of enforcement that can actually work against effective compliance programs.

A new approach is needed that encourages strong cultures that reinforce open information sharing and self-reporting. As the author specifically notes, Starling is building the tools that can support such a change.

Here is a link to the full article.

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Managing for the Trust Yield

Starling Team

Click below to see presentation.

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HR data analytics is exploding in use and sparking change in business

Starling Team
By Dan Ring

A new report by Deloitte Consulting lists nine trends reinventing the HR software market, including people analytics, continuous performance management and employee engagement.

CHICAGO — An increasing number of companies are using HR data analytics to predict business performance, making it one of the top trends driving change in human capital management.

In “HR Technology Disruptions for 2017: Nine Trends Reinventing the HR Software Market,” Deloitte Consulting said human resources analytics is helping companies predict fraud and detect compliance violations, identify top employees at risk of quitting and find the drivers of unplanned absences among staff.

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Wells Fargo: What Drives Toxic Corporate Culture

Starling Team
Jeffrey Kupfer and Stephen Scott

Stephen Scott, a risk specialist, and Jeffrey Kupfer, a former U.S. Treasury official, are co-founders of Starling Trust Sciences.

“There was no incentive to do bad things.”

With this short statement, Wells Fargo WFC -0.38% CEO John Stumpf summed up the central problem with efforts to reform culture and behavior in banking: an emphasis on “tone from the top” that fails to recognize that it is the “tone from the middle” that truly shapes organizational behavior.

“Everything we do is built on trust.” So begins Wells Fargo’s vision and values statement, featured prominently on its website. It goes on to characterize the firm’s culture: a “pattern of thinking and acting with the customer in mind … the habit of doing the right things, and doing things right.”

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Regtech rising: Automating regulation for financial institutions

Starling Team
By Kevin Petrasic, Benjamin Saul and Helen Lee

Financial institutions and regulators that harness the opportunities and manage the risks of adopting regtech solutions will reap big rewards.

Regulatory compliance is timeconsuming and expensive for both financial institutions and regulators. The volume of information that parties must monitor and evaluate is enormous. The rules are often complex and difficult to understand and apply. And much of the process remains highly labor-intensive, when even the most automated solutions are often incompatible with other systems and, even today, most still depend heavily on manual inputs.

As a result, costs have risen significantly for financial institutions in recent years. According to Federal Financial Analytics, a policy analysis firm, the six largest US banks spent US$70.2 billion on compliance in 2013, twice the US$34.7 billion spent in 2007.1 In 2015, the Financial Times estimated that some of the world’s largest banks each spent an additional US$4 billion a year on compliance since the financial crisis.2

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