Singapore - Financial institutions here are still trying to figure out the impact of conduct risks, a new survey by recruitment consultant Robert Half has shown.
The survey found that 73 per cent of banks and financial services here do not have a very clear view of how conduct risks relates to their business.
Conduct risks have to do with how financial firms go about their business, for example, how they sell risky products and how they treat their customers.
The survey found that 91 per cent of Singapore chief financial officers feel the regulatory focus on conduct risk has a significant or moderate impact on their operations and practices.
But only 27 per cent of them had a very clear view of how conduct risks related to their business and operations. In this aspect they lagged behind their British counterparts (42 per cent) but were roughly in line with respondents from Hong Kong (27 per cent) and Japan (25 per cent)
Forty-four per cent of mid-sized financial firms here have the clearest view about conduct risk, followed by big firms at 26 per cent and small firms at 19 per cent.
Robert Half Singapore managing director Stella Tang said that's because small firms often lack the expertise and the resources needed, while large firms have to deal with more complex risks.
"Mid-sized firms have enough resources to manage the risk, and usually engage in a more limited range of activity than larger firms, so there are lesser areas for conduct risk to occur."
She added that 59 per cent of firms intend to hire more permanent staff to deal with the issue of conduct risk, while 63 per cent will recruit more part-time staff.
It's a sign that the financial firms are taking conduct risks seriously.
"Few acts do more harm to an organisation's reputation than a scandal involving misleading vulnerable consumers," said Ms Tang.
"Being caught selling inappropriate and risky products to the elderly or less educated can destroy a company's brand - as well as the investor's life savings," she said.
Some 350 senior business leaders from Singapore, Hong Kong, Japan and Britain were interviewed for the survey. Seventy-five of them weretks from Singapore.