“There but for the grace”….

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The brief for this article is simple, something of interest for institutional firms rather than having a retail focus.  This gives us the opportunity to consider the issues for whole asset managers and investment banking, and in many instances allows retail firms to sit back and think how lucky we are. From experience what happens in wholesale will filter down to others part of the industry in time. In this edition we are looking at two issues which on the face of it, appear to be big firm issues….

Cybercrime is however, not just a big firm issue. It is a question of when your own defences will be breached, and in all likelihood it will be a simple phishing attack that will open the doors of your firm to criminals. Of course larger firms have the resources and money for dedicated IT staff and cybercrime experts to adhere to and apply for various ISO certificates to help them prevent such attacks. Phishing of course relies on people being fooled and this can happen to any one of us.

A common attack appears to be from the email of someone you know well

The definition of ‘Phishing’ is the attempt to acquire sensitive information such as usernames, passwords, and credit card details (and sometimes, indirectly, money) often for malicious reasons, by masquerading as a trustworthy entity in an electronic communication.  A common attack appears to be from the email of someone you know well (until you scrutinise the email address and see there is a letter different) asking you for sensitive data, giving you an instruction to open an attachment, or as we heard recently, simply asking you to send money. Ask yourself the question, if a “client” asks you to pay away money to them, or to a third party, do you have sufficient checks in place to make sure it is legitimate?

The second issue is the announcement by the FCA in November that they intend to undertake a market study into asset management, as outlined in the 2015/2016 business plan.  This forms part of their wholesale sector competition review and will see the regulator seeking to understand:

  • how asset managers compete to deliver value
  • whether asset managers are willing and able to control costs and quality along the value chain
  • how investment consultants affect competition for institutional asset management

The findings are bound to have a profound impact on retail business and underlying customers, as the aim of the study “is to understand whether competition is working effectively to enable both institutional and retail investors to get value for money when purchasing asset management services”.  Included in the next steps, the FCA also said “If we conclude that competition is not working well, we may intervene to promote effective competition. We can do this through rule-making, introducing firm specific remedies or enforcement action, publishing general guidance or proposing enhanced industry self-regulation”.

It wouldn’t be right to make comment or second guess the findings at this stage. However, with the interim report due in Q2 2016 and the final report in early 2017, watch this space!

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Julia Kirkland

Through our award winning training and consultancy partnership FSTP LLP we hope to become a trusted provider of services to client firms across Financial Services. Specialties: Training and consultancy, project and interim management from regulatory issues through to management development and board services. Chartered Member of the Chartered Institute of Securities & Investment

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