On 14 November a draft withdrawal agreement and political declaration on future relations between the UK and EU was published.

In an environment of rising regulatory and compliance costs, technological advances and increasing customer expectations, emerging regulatory technologies (‘RegTech’) have been heralded as a revolution for financial services firms looking to manage regulation more efficiently. Expected benefits include an improved customer experience, better business outcomes and the ability to manage risks in a more cost-effective manner. Given the current challenges stemming from manual business activities, poor data quality and a lack of holistic monitoring and risk analytics, it might be expected that firms would be rushing to implement RegTech solutions.

Organisations spend between $1- $5 million for every $1 billion in revenue on regulatory compliance. With the cost of compliance making up such a high share of revenue, it is no surprise that over-regulation remains a top threat to company growth across the world.

The Times newspaper reported this morning (1 November) that “Theresa May seals Brexit deal on financial services”, a story that moved currency markets, signalling that the UK government may have reached agreement about how Britain’s most significant export industry will trade with the EU in the future. 

Do you test end-to-end operational resilience? You might think so, but approaches to IT Disaster Recovery (ITDR) and Business Continuity Management (BCM) testing hasn’t evolved much over the past 10 years and has arguably not kept pace with our fast-paced Financial Services industry. With new stress testing challenges from regulators, it’s time to re-evaluate resilience testing.

As IFRS17 comes sharper into focus for the insurance industry as a whole, it is becoming ever-clearer that the legacy insurance market will not escape its grasp. Potential changes to the way that profit from past and future transactions can be recognised on transition and in the future mean that it is critical that these changes are fully understood by legacy market participants in order to plan for the financial and operational impacts on your business.

There has been significant discussion on both sides of the channel on the impact of a no deal Brexit on the UK’s economy. This is unsurprising considering the EU-27 is the UK’s largest export market. But when it comes to  financial services, the scale of the UK market means that this relationship is reversed. Nowhere is this more pronounced than in the area of clearing of derivative trades.

As the second year under the FRC CASS (client money and assets) standard draws to a close, it’s an ideal time to reflect, revitalise and prepare for the year ahead. Working with over 70 CASS firms in the banking sector, we’ve collated our experiences from the last 12 months to provide insights into the trends/themes we’ve observed in CASS.

By Andy Moore This is not the first time the PRA has written to general insurers, highlighting its concerns about the pressure on reserving and its expectations. The first one I remember was a letter to CEOs in November 2014 – and they have been annual since. Lloyd’s have kept...

By Alex Bertolotti People management is hard to get right first time, and as such should be prioritised. What’s more, lessons learned from prior regulatory driven transformation programs could be crucial in your success. So far, in my series of IFRS 17 blogs, I have focused heavily on the technical...

As the summer draws to a close so too has the time for consumer credit firms to prepare for new Financial Conduct Authority (FCA)  staff incentive rules published in March. The new rules came into force on 1 October. While firms will have prepared in different ways for the deadline, they should all be aware of the FCA’s underlying messages: that it expects firms to become more customer-centric and also to focus and understand the potential “harms” that customers could be exposed to.

I was recently invited to chair a panel at the Global Innovation Institute (GI2) conference in Paris to discuss RegTech policy with a number of regulators. Our discussion revolved around our understanding of what RegTech is, what the role of the regulator is today and what it will be in the coming years. Here, I have outlined some of the key themes from the discussion.

Across the life and pensions market, businesses are asking “how can we ensure that our operations are fit for the future?” 

It’s approaching two years since the European Commission (EC) published its CRR II/ CRD V proposals. The pace of negotiations has been slow. But since the spring, negotiations have stepped up and political pressure to get an agreement by the end of 2018 is building up. This means that impacted firms should ramp up their planning for one of the most controversial aspects of the proposals: the requirement for large non-EU banking groups with two or more entities in the EU to establish an ‘Intermediate EU Parent Undertaking’ (IPU).

Technology is undoubtedly changing the way financial services organisations operate with aging functions being removed or automated to drive efficiency and cost reduction. At the same time new delivery channels are emerging that allow companies to interact with each other and their customers in ways not imagined at the turn of the century. With an unprecedented pace of change, how do businesses and policymakers keep pace with innovation?

As the Brexit negotiations continue to progress slowly, financial services firms are putting contingency plans into effect for a no deal Brexit in March 2019. Recent weeks have also seen more activity from the UK Government to prepare for the possibility of no deal with the EU-27. As part of this the Government has started to publish a series of draft statutory instruments (SIs) which would provide the UK with a workable financial services regulatory framework in March 2019 should the UK and EU-27 not be able to reach an agreement.

In the recent UK Life & Pensions: A roadmap to succeed in a fast-changing sector report PwC explores the transformational trends reshaping the UK life and pensions sector and sets out a practical roadmap to help tackle the challenges ahead. The Financial Conduct Authority’s (FCA) fair treatment of with-profits customer review highlights many of these pressing issues.

By Andrew Gray and Conor MacManus The UK Government has now confirmed that, rather than pursue a model of mutual recognition to allow market access for financial services firms post-Brexit, it will seek improvements to the EU’s existing equivalence model. At this stage we don’t know whether the EU-27 will...

By Hortense Huez and Mete Feridun The landscape for investment firms is changing fast through a number of concurrent reforms including the FCA’s extension of the Senior Managers and Certification Regime (SMCR), its increased focus on the quality of prudential regulatory returns, and the EU’s overhaul of the prudential regulations...

By Andrew Gray and Conor MacManus Brexit: regulatory developments Brexit is fundamentally affecting both UK and EU-27 financial services businesses from a regulatory and supervisory perspective. Anticipating a different relationship between the UK and EU-27 post-Brexit, regulators and other policy makers are expecting significant changes to their rules and processes....