A matter of trust: Managing individual conflicts of interest for financial institutions

June 2012

Overview

As the United States emerges from the financial crisis, financial institutions are facing increasing pressure from regulators, shareholders, media, and the public regarding individual conflicts of interest.

Organizations that establish programs to find and mitigate individual conflicts of interest likely pay less to administer such programs than to repair financial standing and/or reputation. Other benefits include:

  • Insulating the organization from heightened regulatory scrutiny.
  • Safeguarding the bottom line
  • Protecting the brand and reputation
  • Creating public trust in the organization
  • Promoting the organization to clients, employees, and prospects as a responsible corporate citizen

The lack of a comprehensive and effective program can hamper the disclosure and management of individual conflicts of interest, potentially resulting in regulatory and civil penalties as well as collateral damage to a company’s brand and reputation.

An effective framework for individual conflict-of-interest management in financial institutions is based on governance and organization, policies and procedures, analytics and reporting, and technology and data. Conflict-of-interest management programs should be periodically reviewed and updated to reflect changing risks.

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A matter of trust: Managing individual conflicts of interest for financial institutions

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John Garvey
Global FS Advisory Leader & U.S. Banking & Capital Markets Leader
Tel: +1 (646) 471 2422
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