Employee conduct is critical for financial institutions due to the reputational and regulatory risks. It is a complex, enterprise-wide area involving multiple roles, policies, and regulators. Employee conflicts of interest can subject a firm to regulatory actions or fines. Left unchecked, a company culture that enables conflicts of interest can lead to outsized operational risks that may even threaten the viability of the firm.

Inadequate technology makes it all too easy for employee transgressions — intentional or not — to slip through the cracks and go unreported, unmitigated, and unremediated. This potentially exposes firms to continued unauthorized employee conduct as well as regulatory scrutiny, actions, or fines.

This report examines conduct issues under scrutiny by regulators, the development by financial firms of elaborate internal guidelines in response to regulation, and the technology challenges of managing employee conduct.

This report was commissioned by RegEd, but the analysis and conclusions are Celent's alone.