The Model Office Blog

More Compliance Chat

[fa icon="calendar"] Sep 18, 2020 10:24:23 AM / by Chris Davies

Dear CEO, there you go that made you tremble didn't it? Well the FCA have been as active as ever this week and produced directives that are indicative of the direction in which UK regulation is likely to move forward over the next few years. (Your compliance joke's at the bottom of this blog)

Firstly we have the latest instalment in The FCA's gripping '5 Conduct Risks'series. seriously this is really good stuff and although focused on the banks, applies to all retail investment firms too. This is very important considering the need to ensure your Senior Managers and Certification Regime (SM&CR) certification process and staff conduct training is on track. 

The key messages are:

  • Despite significant improvement, there remains a lack of awareness, in-depth understanding and the ability to identify day-to-day conduct risks
  • Some firms have taken insufficient steps in ensuring the contribution of personal conduct and behaviour to achieve conduct objectives
  • Although most firms have clear escalation and whistleblowing channels, in practice they are largely unused and followed in only the most serious cases
  • Participants were often unclear on their firm's corporate purpose statements and how their role and responsibilities contribute

The Second issue is symbolic of the work done by regulators around digitisation, in both FinTech and RegTech. This will become even more of a priority for them in the changed world created by COVID-19, remote audits spring to mind.

The FCA's digital sandbox for example, goes form strength to strength and the latest pilotwill enable innovative firms to test and develop proofs of concept in a digital testing environment around three use cases related to coronavirus, including:

  • detecting and preventing fraud and scams
  • supporting the financial resilience of vulnerable consumers
  • improving access to finance for small and medium-sized enterprises.

The FCA Dear CEO letter to professional Insurance Intermediaries shows the FCA believes the general insurance sector carries significant risks of potential customer harm, with the most significant risk within the intermediary portfolio being that of customers purchasing unsuitable or poor-value products. This is attributed to inappropriate sales tactics and insufficient or unclear information at the point of sale.

The letter highlights the importance of robust governance and controls, and the need to embed healthy cultures and behaviours within firms. The FCA will focus on these themes and the letter sets out some of the key related issues, such as bonus and incentive arrangements.

Finally, but not least, the FCA are sending out yet another Financial resilience questionnaire to advice firms (they're clearly concerned) at Model Office-MO® we have made our Financial Resilience Diagnostic free of charge so firms gain heat mapped dashboards and assess the strengths of their firm’s financial ratios and cashflow. You can sign up and download it for free here.

Your compliance Joke:

“How many compliance officers does it take to change a light bulb?”

“Three. One to change it, one to check it and one to check it again and file a report.”

If you're interested in finding out more you can book a demo of our software please click below to see MO® in action. 

Please click the below icon link to MO®'s #RegTech platform and learn more about MO® today..

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Topics: Financial regulation, Financial business development, fintech, regtech, Risk management, practice management, FCA, advice, HMT, suitability, FAWG, FAMR, MiFIDII, SMCR, Data, GDPR, Chatbot, Culture, Enforcement, supervision, audit, Conduct, AI, Risk,, Accountability, Platforms, PROD, Product governance, digital,, Regulatory, Reporting, resilience, cyberrisk

Chris Davies

Written by Chris Davies

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