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Temple Risk Regulation
Keeping up with the Jones’s?
One of the great benefits of consultancy work is
having the opportunity to see how very different
firms in different sectors tackle the same regulatory
Many of the solutions are transferable and firms
take their own spin on how to tailor approaches that
work for them. However, management practices
keep on moving and it’s arguable that once the
regulator has seen a particular solution well
executed in one firm it sets the bar higher for
In a sense the regulator’s expectations are naturally
creeping up all the time and FCA’s deliberate
raising of the bar can only accelerate this.
Investing in People and
The ideal business response is to have capable
well-motivated employees who continuously
develop their skills in an environment where the firm
also invests in suitable IT.
It all sounds simple but actually achieving that
harmonious situation is very difficult in practice.
If your peer firms have better CPD, Project and
Programme Capabilities, IT and support services
don’t be surprised if your FCA Supervision Team
finds your systems and controls less than
There are also mindsets and cultural dispositions
that need to change too. Under FSA it would have
been common to position a firm’s regulatory efforts
to make an overall demonstration that there were
reasonable systems and controls in place. If you
like, with the firm and its Compliance team taking a
“tactical” approach to regulation investing in
“mitigation”, knowing that somewhere the firm would
fail. That looks like old fashioned thinking now as
FCA has made it very clear that generally “decent”
systems and controls are something of a “given”.
Post April 2013, there is an expectation that firms
will be able to show that the customer’s interest is at
the heart of the firm’s business model. Not easy.
Business Leaders need to really
know the Regulatory Landscape
With the establishment of a Three Lines of Defence
controls models now commonplace in firms, senior
management will be keenly aware of their
responsibilities and potential personal liabilities.
We would argue that management’s regular
business strategy meetings must-more than ever-be
supported by up-to-date and well informed
regulatory and risk thinking and awareness.
Especially in the retail sector with forthcoming
change s on platform payments, Solvency
changes, adviser charging still work-in-progress, the
mortgage market review and consumer credit
regulation to transfer to the FCA, there are multiple
and major challenges ahead.
Chief Risk Officers and Heads of Compliance have
challenging years ahead keeping their firms up-todate
and that ignores the ongoing attention required
by Governance and anti financial crime systems
and controls (including cyber security).
If you are to keep up with the regulatory and risk
Jones’s, the budget for risk and regulatory
resources must genuinely match the challenges
Contact/Action to discuss this article or any
other FCA related matters confidentially please
07794 612 430