Barclays 2013 Annual Report Download - page 230

In 2013 there were a number of conduct risk issues affecting the Group,
where Barclays conduct has not met the expectations of regulators and
other stakeholders and where the consequences are likely to extend
into 2014 and beyond. These include participation in benchmark rates,
interest rate hedging products and Payment Protection Insurance.
The lessons learnt from these events and our strategic intent to
become the ‘Go-To’ bank has influenced our determination to put
customer needs and market integrity at the heart of our decision
making and business activities.
In January 2013 Barclays incepted a Conduct Risk Programme to drive
change in Barclays’ culture and business practices to better align them
with Barclays’ aim to help customers achieve their ambitions in the
right way. It is establishing a conduct risk framework to support the
business and cultural changes required to take a more proactive and
forward looking approach, building good outcomes into business
models, provide risk management of conduct risks and appropriate
governance and oversight.
Over the year Barclays has developed its approach to identifying,
evaluating and managing conduct risk and introduced a new principal
risk for conduct risk within the EMRF. This is underpinned by six
underlying key risks which focus on potential detriment to customers
or market integrity across Barclays’ end to end operations.
Development of the Key Risk Framework will continue in 2014 with
implementation of the complete framework planned to be complete by
the end of the year.
Is our current and future business robust, resilient and sustainable?
Principal risk framework – Defines Conduct Risk, Risk Appetite and Roles and Responsibilities
The Six Conduct Risk Key Risks:
Business Model & Strategy
Are the products and services we offer designed properly?
Product Design
Are our new and existing customer expectations managed and met in the right way?
Customer Servicing
Is our business run in the right way?
Governance & Culture
Are the right products sold in the right way?
Transaction Servicing
Are we effectively protecting our business, our clients and market integrity?
Financial Crime
The Principal Risk Framework targets 10 outcomes, which are positive indicators that Barclays is putting its clients and customers and market
integrity at the heart of its business.
1 Our culture places customer interests at the heart of our strategy, planning, decision making and judgements.
2 Our strategy is to develop long term banking relationships with our customers by providing banking products and services that meet their
needs and do not cause detriment.
3 We do not disadvantage or exploit customers, customer segments, or markets. We do not distort market competition.
4 We proactively identify conduct risks and intervene before they crystallise by managing, escalating and mitigating them promptly.
5 Our products, services and distribution channels are designed, monitored and managed to provide value, accessibility and to meet the needs of
our customers.
6 We provide banking products and services that meet our customers’ expectations and perform as represented. Our representations are
accurate and comprehensible so our customers understand the products and services they are purchasing.
7 We address any customer detriment and dissatisfaction in a timely and fair manner.
8 We safeguard the privacy of personal data.
9 We do not conduct or facilitate market abuse.
10 We do not conduct or facilitate financial crime.
Conduct risk is the risk that detriment is caused to our customers, clients, counterparties or Barclays and its
employees because of inappropriate judgement in the execution of our business activities.
All disclosures in this section (pages 228 and 229) are unaudited
Risk review
Conduct risk
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228 Barclays PLC Annual Report 2013