The Model Office Blog

FCA project Innovate, regulatory resources and RegTech development

[fa icon="calendar"] Jan 31, 2017 3:54:02 PM / by Chris Davies

Launched with plenty of fanfare, the FCA’s project innovate has its Sandbox live with 24 accepted participants playing in its regulatory safe harbour and testing innovative services, products and business models in a live environment. The FCA TechSprint initiative is also live where app developers meet and are challenged over two days to create a prototype technology for streamlining business operations and regulatory reporting.

With all this creativity in play, when we were asked into the FCA to ‘kick the tires’ around the sandbox, we thought that the regulator should walk its talk and create a digital diagnostic platform that allows firms to see if they are hitting the regulatory bases and also assess how they are competing in a highly competitive market. ‘Good idea’ said the FCA, ‘But’ (there’s always a but) ‘we can’t be seen to be prescriptive’.

So with Model Office - MO already in production as a business development diagnostic and the fact that managing regulatory risk is a bit like hurdling in the dark, we decided to calibrate the FCA COBs suitability rules, KYC, TCF and MiFID appropriateness tests into MO’s platform, not forgetting key risks such as BREXIT.

Not only this, we also decided to review all the relevant FCA suitability focused final guidance, discussion, occasional and market studies and their good outcomes into MO’s algorithm for its steers to help improve scores.

So we now have a platform that uses Engage Insights 5 year market research on benchmarking professional firm performance against our 5 keys and the FCA suitability directives and relevant papers they produce factored into MO’s algorithm.

All this creates prescriptive outputs using gamification as an enabler tool with performance dials, radar charts and strategic plans to help firms make sense of their professional development journey against a continued backdrop of regulatory risk, consumer mistrust and increasing competition. 

Some of the papers we have assessed and incorporated are below:

Regulatory Paper

FCA Business plan 2016/17

FS 16/10 Smart Consumer Communications

FR 16/3 HMT & FCA Financial Advice Market Review

MS 15/2.2 Asset Management Market Study

TR16/1 Assessing suitability, research & due diligence of products & services

TR 15/12 Wealth Manager firms & private banks suitability of investment portfolios

TR14/21 Retail investment Advice, Adviser charging & services

TR14/10 Distribution of Retail Investments: purchasing investments without personal recommendation or with simplified advice

CP 16/19 Markets in Financial Instruments Directive II Implementation

FG 16/5 Guidance for firms outsourcing to the ‘cloud’ & other third party IT resources

FG 15/4 Social media & customer communications

FG 15/10 Risks to customers from performance management at firms

FG 12/16 Assessing suitability: Replacement business and Centralised Investment propositions

FG 11/05 Assessing suitability: Establishing the risk a customer is willing and able to take and making a suitable investment selection

Please click the below logo link to the platform and learn more about MO today..

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Topics: Benchmark, compliance, client centric, Financial regulation, Financial business development, fintech, Human resource development, client engagement, regtech, Risk management, Soft compliance, practice management, FCA

Chris Davies

Written by Chris Davies