The Office of the Superintendent of Financial Institutions (OFSI) is surveying banks to understand how corporate culture can create excessive risks for major lenders.
These surveys are being conducted at a time when regulators around the world are cracking down on misconduct. A series of scandals has shaken trust in the practices of global banks.
According to the Global and Mail, OSFI declined to comment on specific financial institutions, but “confirmed its new culture and conduct division is using its risk-culture surveys to collect diagnostic information from banks to assess the linkages between cultural norms and behaviours at financial institutions and the resultant risks they might represent.”
Banking regulators are taking their cues from the Financial Stability Board, an international body that makes recommendations to improve stability of the global financial system.
Last year, Starling estimated last year that risk and compliance costs account for roughly 15-20% of the fixed-cost base at most financial institutions. In case you missed it, you can find Starling’s 2019 Compendium of Culture and Conduct Risk in the Banking Sector here.