Making Bankers Liable ‘Will Enhance Industry Culture’ | The Times

Starling Team

A new regime that would hold bankers accountable for their failings will improve the culture of the industry, according to a Central Bank executive.

Derville Rowland, the director general of financial conduct, says that introducing an accountability regime for financial services companies was crucial to ensure firms are properly regulated.

With this new regime Central Bank could fine, discipline, or disqualify senior bankers more easily when failings are apparent.

“What we would like to see is that the tone for a positive culture is set from the top at the firms, cascaded throughout the entire organisation — and echoed from the bottom up. We believe that these proposals to strengthen individual accountability are an important step in that direction,” said
Derville Rowland.

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Tailored with Technology | The Economist

Starling Team

A link between technology and corporate growth has always existed, but it continues to grow. A recent survey shows that 9 out of 10 executives plan to increase adoption of new technologies.

Another popular trend has also emerged around big data and analytics. 38% of survey respondents say that this is among their top three priorities, higher than clould computing, AI and cyber security.

Now, firms are using big data and analytics for risk management, client attraction and more.

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U.S. Financial Regulatory Agencies Join the Global Financial Innovation Network | U.S. Securities and Exchange Commission

Starling Team

On October 24th, four primary regulators of the US banking sector, the Securities and Exchange Commission (SEC), Office of the Comptroller of the Currency (OCC), Commodity Futures Trading Commission (CFTC), and the Federal Deposit Insurance Corporation (FDIC), collectively announced that they have joined the Global Financial Innovation Network (GFIN). The GFIN is a collaborative global body involving bank regulators, market regulators, central banks, and other interested entities from about 40 jurisdictions around the world.

In addition to their shared interest in fintech innovation, the group aims to promote the adoption of regtech tools among the financial institutions that they oversee. An initiative launched by the UK Financial Conduct Authority in the summer of 2018, membership in the GFIN has grown rapidly. Until now, the only US member of the GFIN was the Consumer Financial Protection Bureau.

With today’s announcement, the SEC, OCC, CFTC and FDIC have demonstrated that US regulators share in a growing interest in international regulatory collaboration and knowledge sharing that will benefit fintech and regtech firms, and those whom they aim to serve. In February of this year, the GFIN opened an application process whereby regtech firms interested in running cross-border trials of their tools could apply for consideration to do so under a formal GFIN scheme.

Some 45 firms applied, with only 8 being provisionally accepted into the inaugural cohort. Starling is proud to be one such — and the only firm in the cohort that is focused on the problem of managing culture and conduct risk. Specifically, to date, the UK Financial Conduct Authority (FCA), the Hong Kong Monetary Authority (HKMA), the Australian Securities & Investments Commission (ASIC), and the Dubai Financial Services Authority (DFSA) have selected Starling to run trials among firms in their jurisdictions.

We are hopeful to work with US regulators new to the GFIN as well. Formal acceptance into GFIN is contingent upon submitting a testing plan that the GFIN community signs off on. If selected, Starling will join organizations around the globe working to drive innovation in the financial sector that benefits financial firms, consumers, and broader stakeholder communities.

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Corporate Governance Taskforce Report | Australian Securities and Investments Commission

Starling Team

On October 2cd, the ASIC released a review by their Corporate Governance Taskforce. This review was the first in a series of reviews  examining corporate governance practices. James Shipton launched this report with a by addressing the Australian Institute of Company Directors. You can find that speech here.

Globally, there is an increasing need to recognise the impact of issues around goverance, individually and collectively. There is also an awareness on the impact they can have on the  customers  and the industry as a whole.

The review revealed that boards were grappling to oversee non-financial risk. Their oversight was less developed than expected. This is in contrast to the approach to financial risk for these organizations. That appraoch well developed with metrics to assess success or failure.

They also found reliance on metrics that are ‘lag indicators’. The ASIC sugguests that boards develop more ‘lead’ and ‘proxy’ indicators for non-financial risks.

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Australian Regulator to Require Annual Declarations on Governance from Banks | Reuters

Starling Team

On Wednesday, Australia’s banking regulator said it will ask for annual declarations from financial institutions on corporate culture, conduct, and governance.  If concerns arise, they will conduct “deep dive” reviews

This move is part of a four-year plan to improve governance and build trust in the financial system after misconduct was uncovered in the sector. As conduct and culture risks grow, comapnies like Starling provide visibility into the hidden relational dynamics among employees that impede company performance and create invisible and systemic risks.

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