RBS 2013 Annual Report Download - page 363
Download and view the complete annual report
Please find page 363 of the 2013 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1
-
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
-
197
-
198
-
199
-
200
-
201
-
202
-
203
-
204
-
205
-
206
-
207
-
208
-
209
-
210
-
211
-
212
-
213
-
214
-
215
-
216
-
217
-
218
-
219
-
220
-
221
-
222
-
223
-
224
-
225
-
226
-
227
-
228
-
229
-
230
-
231
-
232
-
233
-
234
-
235
-
236
-
237
-
238
-
239
-
240
-
241
-
242
-
243
-
244
-
245
-
246
-
247
-
248
-
249
-
250
-
251
-
252
-
253
-
254
-
255
-
256
-
257
-
258
-
259
-
260
-
261
-
262
-
263
-
264
-
265
-
266
-
267
-
268
-
269
-
270
-
271
-
272
-
273
-
274
-
275
-
276
-
277
-
278
-
279
-
280
-
281
-
282
-
283
-
284
-
285
-
286
-
287
-
288
-
289
-
290
-
291
-
292
-
293
-
294
-
295
-
296
-
297
-
298
-
299
-
300
-
301
-
302
-
303
-
304
-
305
-
306
-
307
-
308
-
309
-
310
-
311
-
312
-
313
-
314
-
315
-
316
-
317
-
318
-
319
-
320
-
321
-
322
-
323
-
324
-
325
-
326
-
327
-
328
-
329
-
330
-
331
-
332
-
333
-
334
-
335
-
336
-
337
-
338
-
339
-
340
-
341
-
342
-
343
-
344
-
345
-
346
-
347
-
348
-
349
-
350
-
351
-
352
-
353
-
354
-
355
-
356
-
357
-
358
-
359
-
360
-
361
-
362
-
363
-
364
-
365
-
366
-
367
-
368
-
369
-
370
-
371
-
372
-
373
-
374
-
375
-
376
-
377
-
378
-
379
-
380
-
381
-
382
-
383
-
384
-
385
-
386
-
387
-
388
-
389
-
390
-
391
-
392
-
393
-
394
-
395
-
396
-
397
-
398
-
399
-
400
-
401
-
402
-
403
-
404
-
405
-
406
-
407
-
408
-
409
-
410
-
411
-
412
-
413
-
414
-
415
-
416
-
417
-
418
-
419
-
420
-
421
-
422
-
423
-
424
-
425
-
426
-
427
-
428
-
429
-
430
-
431
-
432
-
433
-
434
-
435
-
436
-
437
-
438
-
439
-
440
-
441
-
442
-
443
-
444
-
445
-
446
-
447
-
448
-
449
-
450
-
451
-
452
-
453
-
454
-
455
-
456
-
457
-
458
-
459
-
460
-
461
-
462
-
463
-
464
-
465
-
466
-
467
-
468
-
469
-
470
-
471
-
472
-
473
-
474
-
475
-
476
-
477
-
478
-
479
-
480
-
481
-
482
-
483
-
484
-
485
-
486
-
487
-
488
-
489
-
490
-
491
-
492
-
493
-
494
-
495
-
496
-
497
-
498
-
499
-
500
-
501
-
502
-
503
-
504
-
505
-
506
-
507
-
508
-
509
-
510
-
511
-
512
-
513
-
514
-
515
-
516
-
517
-
518
-
519
-
520
-
521
-
522
-
523
-
524
-
525
-
526
-
527
-
528
-
529
-
530
-
531
-
532
-
533
-
534
-
535
-
536
-
537
-
538
-
539
-
540
-
541
-
542
-
543
-
544
-
545
-
546
-
547
-
548
-
549
-
550
-
551
-
552
-
553
-
554
-
555
-
556
-
557
-
558
-
559
-
560
-
561
-
562
-
563
-
564
Business review Risk and balance sheet management
361
Risk management and measurement
The Group believes that maintaining a strong regulatory risk framework is
fundamental to ensuring sustainable growth, rebuilding its reputation and
maintaining stakeholder confidence.
Regulatory Affairs’ two policies are supported by risk appetite statements
and by relevant benchmarking activity against the Group's peer banks.
These are framed by the Group’s stated regulatory risk and compliance
risk appetite, which says there is no appetite for material or widespread
breaches of rules, expectations, regulations or laws, individually or in
aggregate. It recognises, however, that genuine errors occur, and so the
Group accepts limited, non material regulatory risk and subsequent loss.
This is reflected in the Political, Legislative and Regulatory Environment
Policy Standard, which requires that all likely changes in official policy,
legislation, regulation or other requirements must be identified, and
assessed for potential impact, using an internal classification system.
The regulatory risk and compliance risk appetite is also reflected in the
Group Relationships with Regulators Policy Standard, which states that
all significant /material contacts with regulators must be identified and
managed effectively and that all information provided to the regulators
must be accurate, consistent and delivered within agreed timescales.
The level of regulatory risk remained high during 2013, as policymakers
and regulators continued to strengthen regulation and supervision in
response to the events of 2007/2008. This can be measured in high
levels of interaction with supervisory authorities such as meetings,
requests for information, visits and investigations, as well as in policy
developments and proposals for new rules. At 31 December 2013 the
Group was managing 45 “High Impact” regulatory or legislative policy
initiatives, and a further 63 “Medium-High” Impact initiatives. In 2013 as
a whole, the Group had also reviewed over 305 consultations in its core
markets.
Against the backdrop of intensified regulatory pressure, Regulatory
Affairs has increased the size of its team, as well as improved and refined
its operating model, tools, systems and processes.
A “Centres of Excellence” model was adopted in July 2013. This has
brought together divisional and functional resources to manage issues
more efficiently, using specialisms in existing teams and managing issues
cross-divisionally.
Internal communications on regulatory issues were strengthened. This
involved staff seminars and the publication of key information on internal
websites, including the weekly Regulatory Affairs Flash Report, covering
key regulatory developments and supervisory interactions.
Quarterly reporting to the Group Audit Committee captures all material
regulatory reviews and investigations as well as other regulatory
developments worldwide. The reporting also tracks the status of, and
trends in, key regulatory relationships.
*unaudited
Risk mitigation
The early identification and effective management of changes in
legislation and regulation, as well as other requirements that may affect
the Group, are critical to the successful mitigation of regulatory risk.
All regulatory and compliance changes are managed so as to ensure
timely compliance readiness. Those assessed as having a “High” or
“Medium-High” impact are managed especially closely with the aim of
mitigating the impact through, for instance, changes to strategy or
business activities, or external engagement.
RBS Regulatory Affairs also communicates information on regulatory
developments and follow-up engagement with client-facing businesses
and functions, helping them identify and execute any required mitigating
changes to strategy or business models. The key regulatory policies are
kept under annual review.
Reputational risk
Definition
Reputational risk is the risk of brand damage and/or financial loss owing
to a failure to meet stakeholders’ expectations of the Group’s conduct
and performance. Stakeholders include customers, investors, rating
agencies, employees, suppliers, government, politicians, regulators,
special interest groups, consumer groups, media and the general public.
Brand damage can be detrimental to the business in a number of ways. It
can hamper efforts to build or sustain business relationships with
customers, affect staff morale, and reduce access to funding sources.
Sources of risk
Reputational risk can arise across a range of actions taken (or, in some
cases, not taken) by the Group and individuals, as well as its wider
conduct, policies and practices.
Governance structure
The Group Board has the ultimate responsibility for managing the
Group's reputation, although all parts of the Group have responsibility for
any reputational impact arising from their operations, including
relationships with customers. The Board has set the Group’s Purpose,
Vision and Values (PVV), which outline a desired reputation for the Group
“to be trusted, respected and valued by our customers, shareholders and
communities”.
Directors and senior executives are actively engaged in key strategic and
transactional decisions that can have a reputational impact, for example
• Key reputational issues associated with the Group’s strategic plans
are discussed at Board level.
• The Board Risk Committee (BRC) oversees reputational issues and
is directly engaged in strategic reputational management decisions
(e.g. the customer redress policy following the Group’s IT incident).
• The Group Sustainability Committee (GSC) reviews reputational
issues from a customer or sector perspective. It is responsible for
reviewing the Group’s sustainability strategy, values and policies
and aligning the Group’s approach to environmental, social and
ethical (ESE) issues.