FCA business plan 2018/19

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In their latest business plan the FCA (Financial Conduct Authority) have identified 7 priorities for the next 12 months. Firms can use these to consider where to focus their own resources.

  1. Culture/governance – the challenge is for firms to demonstrate the effectiveness of their governance arrangements and how this leads their culture. With the extension of the SM&CR, accountability of individuals will continue to be a key focus. There will be a Policy Statement in the summer on this extension which will provide the final information firms will need.
  2. T&C impact: Have you documented your review of the way decisions are made and communicated? From the review have training needs been identified and are there clear plans to implement solutions?
  3. Financial crime and anti-money laundering – there is a continued expectation of high standards across regulated firms and the FCA anticipate increased use of technology in this effort. They also want awareness of scams to be increased.How could your firm build the skills of staff or enhance communications in order to protect your clients from being caught by a scam?
  4. T&C impact: When was the last time your financial crime procedures were reviewed, with particular emphasis on how the effectiveness of training is assessed and demonstrated?
  5. Data security – building and improving resilience is seen as key and further information will be issued by the FCA on this. They are also concerned about oversight and control where functions (including infrastructure) are outsourced.
  6. T&C impact: How has your work in preparation for GDPR  (General Data Protection Regulations)improved the way your data is managed? What additional training has been provided or is still needed to help staff implement effective data security procedures?
  7. Innovation and big data – the FCA is keen to encourage firms to consider the impact on clients of change, particularly around the use of technology. For example, there will be an FCA consultation on new rules for crowdfunding firms and a Treasury enquiry on possible regulation of cryptocurrencies. Robo-advice and ‘fintech’ are seen as means to fill advice gaps or appeal to millennials.
  8. T&C impact: If you are looking to use ‘fintech’ to expand your business is the client at the centre of your plans? What are the training implications for staff and clients in adopting innovation in your firm?
  9. Treatment of existing customers – the plan encourages firms to review whether all of their customers are at the centre of their business rather than purely the acquisition of new ones. The FCA have specific concerns about pricing practices in general insurance. There was a reminder that the regulation of claims management companies will begin in the Spring of 2019.
  10. T&C impact: Where you have an ongoing relationship with clients is there evidence that you are delivering the level of service promised? What evidence could your firm provide of a training needs analysis or review of management information around the delivery of the promised level of service?
  11. Long term savings and pensions – the plan expresses concerns about the potential mis-uses of pension reforms and announces that there will be a consultation paper on retirement outcomes later this year as well as feedback on their findings on competition in the personal pension market. They are also looking at whether ‘complex’ and high-risk products are being advised on correctly and generally at whether investment products are over-charged. (There will be an interim report on Platforms in the summer)
  12. T&C impact: What evidence do you have that you have reviewed your advice procedures and charging structures? Has the reviewed identified any training needs, for example in explaining complicated concepts? It is anticipated that cash flow modelling will become more widely utilised; have you established how this might impact on the training your firm provides?
  13. High cost credit – there will be continued work to ensure that products are affordable and suitable; the FCA are encouraging the development of alternatives to high cost credit.
  14. T&C impact: If you are in this market or considering it, how could you develop a sustainable alternative offering? How would such a change influence the design of training provided at your firm?

I hope that this brief look at what the FCA perceive as being key issues has reassured you that your firm is on the right track generally, it is likely that it has also identified one or two areas where there may be scope for improvement.

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Compliance Cubed Financial services is constantly changing - my passion is helping firms function effectively and in compliance with FCA regulation

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