Regulators are adopting behavioural science tools pioneered by the Dutch central bank in their supervisory efforts, and firms are taking notice, says Stephen Scott at Starling.
Following the early example of the Dutch central bank, many regulators have now created internal behavioural science units, made up of organisational psychologists and others with similar training. Some banks are now following suit, employing behavioural and organisational scientists to assist with non-financial risk management.
The behavioural science approach pioneered by the De Nederlandsche Bank (DNB) makes use of “psychological methodologies and techniques” that support its supervisory efforts. Behavioural scientists from the DNB have been invited to share their experience conducting “deep dive” culture and conduct risk audits with their counterparts in many jurisdictions, and to provide training in their methodologies for regulators in Singapore, Hong Kong and Australia, among many others.