The FCA's approach to enforcement is evolving. Star's new SMCR solution enables UK firms to evolve alongside it. Here's Steve Brown—Head of Business Development at Star and a veteran compliance officer—with all the details
The Financial Conduct Authority recently published a new business plan detailing its ongoing efforts to become a more forward-thinking, proactive regulator. Among other changes, the document outlines new approaches to using data and technology to fulfill its mission. The document also describes a heightened focus on adaptation to changing market forces and a commitment to testing the limits of the FCA's powers. The language used in the FCA business plan is bold and direct, but what does it mean for risk and compliance teams at the financial institutions under FCA jurisdiction?
NO GOING BACK
In announcing the plan, CEO Nikhil Rathi said firms could expect tougher policies and more decisive enforcement action moving forward, stating there's “no scenario where [the FCA] will return to a light touch, don’t-ask-don’t-tell philosophy.” Notably, Rathi also pointed out that in the coming years, the organization would become "a data regulator as much as a financial one.” The FCA’s recent £120 million investment in data and technology solutions supports that claim, and the organization has also defined clear metrics to track its success in deterring data misuse.
Moreover, it has begun establishing data science units, or DSUs, which aim to center decision-making on data. DSUs help the regulator better understand markets by bringing together different data sets to drive new insights, help uncover possible harm or market manipulation, and enable faster intervention. In light of these developments, firms must rapidly begin implementing risk and compliance approaches that account for new integrated surveillance initiatives (if they haven’t already), and carefully monitor data management practices to detect sources of potential misconduct before they become compliance issues. StarCompliance can help.
Star is on a mission to provide future-ready compliance solutions for firms based or doing business in the UK, as evidenced by our recent acquisition of Individual Accountability Regime and Training and Competency solutions to meet Senior Managers and Certification Regime obligations. With a dedicated SMCR solution, firms can reduce risks associated with regulatory intervention, fines, and reputational damage by demonstrating proper, auditable workflows to the FCA. Our technology also allows firms to drive increased transparency by facilitating the sharing of relevant personnel and conduct-related data among the appropriate stakeholders, and to make risk and compliance practices more efficient and effective.
As measures imposed by the FCA continue to evolve, Star will continue to make compliance simple and easy by providing automated data and workflow solutions that evolve with them. The SMCR wasn’t one-and-done. What regulation ever is? Whether it’s individual accountability, training and competency, or whatever else global regulators might conjure up, Star’s future-ready compliance platform is designed to be there for the long haul.