The banks themselves have greatly stepped up their role in the distribution of third-party financial products, insurance policies, investment funds and corporate bonds. Credit risks and market risks have diminished with their progressive transfer away from banks’ balance sheets, but other types of risks have emerged.
The reputation of a bank is inevitably and increasingly affected by the quality of the products it supplies to its customers. There has also been an increase in both legal and operational risks. The banks’ increasing role in the distribution of third parties’ products makes it crucial to monitor for conflicts of interest. It is extremely important that conduct should be ethical.