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D&I as a non-financial risk: considerations for control functions

The UK Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA) worry that a lack of diversity inclusion (D&I) at UK regulated financial services firms can expose those firms to operational, strategic and regulatory risks.  
Both regulators recently consulted on proposals to improve D&I at regulated firms and is clear from these consultations that the FCA and PRA expect firms to be treating a lack of D&I as a non-financial risk.  This means that the second and third lines of defence at firms need to be monitoring progress towards better D&I and ensuring risks associated with poor D&I are effectively managed.  Our latest post in this series, considering the regulators’ proposals, hones in on firms’ control functions and the adaptations that may be required to meet future UK regulatory expectations. 

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