Year: 2024
Type: article
Abstract: Behavioural risk management (BRM) helps to better prevent risk events that can hurt financial services firms, their customers, shareholders and society. Underpinned by methods and insights from across the behavioural sciences (such as organisational and social psychology, decision making and cognitive science, etc), this forward-looking risk management approach is increasingly encouraged by regulators and invested in by financial institutions globally. This paper provides a practical three-step approach to manage behavioural risk, illustrated with financial services case studies. Future developments are then discussed. The paper closes with common implicit beliefs that may hinder senior risk management professionals initiating BRM in their organisations and a manifesto for action to help get started.
DOI: 10.69554/tgjo9623
Authors: Wieke Scholten, Alexandra Chesterfield
Institution: London School of Economics and Political Science
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4403401926