Responsible thinking


It is now exactly a year since the Financial Conduct Authority (FCA) formally implemented the Senior Managers and Certification Regime (SMCR) into the banking world as a complete overhaul of the previous Approved Persons Regime (APER) to increase individual accountability.

While the full impact of the change has yet to be fully assessed, there is little doubt that it is transforming the way that those working in the banking sector understand their personal and corporate responsibilities, and similarly transforming the role of HR in supporting conduct and compliance strategy. It is already said to be empowering individuals to challenge the status quo, and discuss issues that might have previously remained untouched.

We also know that the same regime will shortly be introduced into the consumer credit arena, including those of us working in the debt collection industry. We were pleased to be invited along to a pre-consultation meeting with the FCA SMCR team last year at which we helped them scope the appropriate application of the regime to the credit industry, so as to ensure proportionality. What we don’t know, as yet, is precisely how that regime will apply, since the promised consultation is not due to be published until the second quarter of 2017. We can, however, draw certain conclusions from what has happened thus far.

SMCR took more than four years of planning and preparation before finally going ‘live’ in the banking and insurance industries on March 7 2016. It seeks to boost personal accountability, putting the onus on individuals to demonstrate that they are taking ‘reasonable steps’ to do the right thing.

Accountability is, of course, important, and while you can delegate tasks, you cannot delegate responsibility.

In many ways, it simply refines and formalises existing regulatory expectations on accountability and governance. What is interesting to note, however, is that the statutory duty of responsibility is leading many senior managers to re-assess the appropriateness of the scope of their responsibilities. There is a great deal of difference, it appears, from what senior managers have previously thought (or declared) fell within their remit to what they actually want to take responsibility for when it comes to liability!

A particular example of this is to avoid the instinct among the banks to make the matter a wholly legal or compliance issue. Of course it is very important to use appropriate legal words to define responsibility, but equally important, and the job of colleagues in HR and OD, is to consider the spirit of SMCR and ensure what the FCA intends is fully reflected in how policy is put into practice.  SMCR is not just about the letter of the law, but rather adopting the regime within ‘business as usual’ and considering how it impacts their day-to-day working environment and the impact on culture.

Accountability is, of course, important, and while you can delegate tasks, you cannot delegate responsibility. Within your business, you need to be clear on who is responsible for what, and how colleagues are expected to work together to discharge their responsibilities. More junior staff may have delegated responsibilities. That means providing them with the necessary learning and development support, perhaps by taking advantage of the new Apprenticeship Levy or other similar training investment.

Mapping responsibilities is clearly a good way forward, but it needs a real conversation with the HR team to understand how responsibilities are properly articulated within an employee’s contract and terms and conditions. All of this has to be achieved without undermining the confidence of your teams, and maintaining morale. The conduct rules have some very obvious hard measures and application but there is also a moral imperative to ensure your company lives through the values that it promotes, and ensuring those values are properly embedded.

The assignment of responsibilities is only one part of the job. It is also imperative that key decisions are made at the right level, and that if an issue arises, the appropriate steps are taken to mitigate or remedy the issue and prevent a potential crisis. Demonstrating you have taken ‘reasonable steps’, as outlined at the beginning, is proving a particular challenge. Individuals are having to show how they arrived at a decision, when and where it was discussed, and the rationale for the decision that was finally taken. That is likely to impact our industry too.

SMCR is unlikely to be welcomed with open arms by an industry that has had to acclimatise to a new regulator and carry the additional cost of compliance. What is certain, however, is that debt collection agencies will need to have a strategy for adapting to and adopting the new SMCR, and the obligations that it brings, and the CSA will be working hard to support its members as we transition to a brave new world.

Although we are not yet in a position to provide guidance for our members the CSA is studying best practice guidance currently available for the Banking sector. We are identifying learning which can be shared for the credit and collections industry and are planning a series of webinars starting in May 2017 for members which focus on the practicalities firms can implement which will help them to prepare. For more information on this, please contact


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Fiona Macaskill, Director of Learning & Development, Credit Services Association. The Credit Services Association (CSA) is the only National Association in the UK for organisations active in the debt collection and purchase industry. The Association, which has a history dating back to 1906, has 300 member companies which represent 90% of the industry, and employ 11,000 people. At any one time its members hold up to £60 billion for collection, returning nearly £3 billion in collections to the UK economy per annum. As the voice of the collections industry, our vision is to build confidence in debt collection by making the entire process clear, easy to understand and less stressful for all those involved. Further information on the CSA can be found at:

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