Every financial service provider must be prepared for arising conflicts when internal and third-party interests collide. Clear-cut conflict of interest management and defined policies help banks find solutions. With ACTICO’s MCI software banks can determine potential conflicts of interest and advert related risks.
Conflicts of interest in banks and financial services result from the variety of services offered: securities transactions for customers, internal and staff transactions, mergers and acquisitions, portfolio management and more. A bank must adopt a position in which conflicts of interest do not have an adverse effect on customers.
Today, bank employees are involved in many complex
projects for the bank itself and its customers. An employee or a financial institution will at some point be
confronted with actual or potential conflicts of interest. But due to the number
and complexity of projects, conflicts of interest are often difficult to
identify or avoid. A systematic approach can provide relief and help institutions take countermeasures.
A bank's management team is responsible for systems that analyze and manage conflicts of interest, including organizational measures, such as separating divisions, and technical measures, such as logging transactions involving customers, relevant persons or the bank. Technical systems must automatically monitor all relevant activities within the bank and decide whether a conflict of interest exists.
Each bank individually determines: the services where conflicts of interest can occur, which divisions and employees are affected and individuals or institutions that may be involved. Based on this conflict of interest matrix, rules arise that are modeled graphically in our MCI software. The analysis only finds matches for constellations where potential conflict exists due to their content or nature. The objective is to avert the risk of loss for the bank, advisor and customer.