Front-office control functions may be still be in their infancy, but the importance of the front office in the broader control framework was recently reinforced by guidance from the Federal Reserve Board (FRB), and the Financial Conduct Authority (FCA).
Defining the first line of defense and its responsibilities remains a challenge even within institutions employing the 3LOD model. For the newly created control functions in the first line of defense, there remains a focus on conduct, authorization, and demonstrating end-to-end control of sales, trading, investment banking and client-facing activities.
There is a general sense in the industry that, due to improvements in technology and greater automation, and the sheer size of the largest global banks, some of these improvements should be sped up.
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