Select Page

Follow me for updates

Follow me to get a notification when I publish valuable articles and posts like this.

I share Thought Leadership on Enterprise Risk Management, Digital Transformation and my own Entrepreneurial journey.

Show your support with a like, comment and SHARE!

When you share, please tag me in the description so I can send you a thank you!


The FCA Business Plan 2018/19 and Discussion Paper (DP) 18/2 clearly identifies culture as a root cause of the major conduct failings and important in restoring public trust in Financial Services. A firm’s culture has become a priority area for the FCA.

Whilst the FCA does not propose to assess mindsets and behaviours directly, the intangible nature of culture has led leaders to question what constitutes a healthy culture and how to promote it?

The FCA will form judgments on a firm’s focus against four key areas;

(1) firm’s purpose

(2) leadership

(3) governance arrangements

(4) approach to rewarding and managing people.

Minimum standards of behaviour in the form of 5 Conduct Rules are at the heart of the Senior Managers & Certification Regime (SM&CR). The focus is:

(1) regulation has to hold the individual, as well as the firm to account

(2) leaders can manage, if not measure culture

(3) leaders should clearly articulate what they are accountable for through governance maps and accountability statements

Beyond regulation

If as the FCA seem to accept regulation is only one part of the equation, how can firms achieve real culture change?

Three key themes have emerged:

(1) A complex, dynamic, multi-system approach is required to influence culture and behaviour

(2) Fostering environments of trust to encourage openness and psychological safety and learning (for example, speak up, collaborate and innovate)

(3) An acknowledgment that regulation can only go so far in improving culture and there is a need to go beyond compliance

Study on consumers’ decision-making in insurance services: A behavioural economics perspective

In October 2017, the European Commission published the above study.

The study concluded:

(1) Behavioural biases as well as time and effort needed to compare alternatives prevent consumers from getting the best deals

(2) Personal advice and comparison tools can be effective remedies, but advice needs to be objective and unbiased

(3) Sub-optimal decision making patterns are prevalent, but consumers make better decisions when they are allowed to pause and reflect AND to modify their insurance choices throughout the purchasing process

(4) Consumers’ highest overpayment resulted from selecting an excess that was too low

(5) The limited availability of information and data relevant to consumers in some countries hamper policy measures to improve their decision-making

Reciproco provides knowledge integration across risk, solvency and strategy, including digital transformation, leading complex and unique projects in regulated sectors. Helping senior executives and management teams focus on strategic challenges to create a competitive advantage.

Darren Munday is the founder and Managing Director of Reciproco. An experienced executive with over 20 years’ global experience with multinational companies, including Chief Risk Officer reporting to the Board.

Darren is an Honorary Visiting Fellow of the Digital Leadership Research Centre, Cass Business School where he also holds an Executive MBA.  Darren is a Certified Fellow of the Institute of Risk Management (CFIRM) and Chartered Insurance Risk Manager (ACII) of the Chartered Insurance Institute.

All rights reserved. Unauthorised use and/or duplication of this material without express written authorisation from Darren Munday is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Darren Munday with appropriate and specific direction to the original author and content.