Sales practices: OCC exams and beyond

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October 2016


During fall 2016, the Office of the Comptroller of the Currency (OCC) began its examinations of sales practices at large and mid-size banks. Many banks have been actively preparing for these exams, and several are far along in conducting their own self assessments. 

Even if few accounts are found to have been opened without customers' consent, the OCC and other regulators will still expect banks to have an enterprise-wide sales practices risk management program to ensure sales practices which could harm customers are prevented in the future. The regulators will hold the Board of Directors accountable given its responsibilities for overseeing that the bank’s revenue-generating strategies (e.g., sales targets) are in line with the bank’s risk appetite. 

This increased focus on sales practices will have implications beyond risk management. For some banks, this spot light will call for moving from a product-push cross selling strategy to one based on specific assessments of customers’ needs. For others, it will hasten their transition away from the retail branch network to more digital engagement with customers.

This A closer look offers our view of (a) supervisory expectations for the enterprise-wide sales practices risk management program and overall risk governance, (b) possible enhancements to improve culture, and (c) implications for future business strategy.

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Dan Ryan

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