By Mark Dury In late September, as dozens of senior FS IT risk professionals gathered for our annual conference, it suddenly struck me that two or three years ago, a large number of their jobs didn’t exist. It’s a testament to how seriously FS organisations are taking IT risk that...

The Financial Conduct Authority (FCA) have recently published Consultation Paper CP 18/29. This sets out a proposed ‘backstop’ authorisation regime for branches of EEA authorised firms which currently operate in the UK under ‘passported’ permissions. This regime would will apply if the UK and EU do not reach a deal and therefore agree the transition period.

The new accounting rules for insurers who have already elected to defer changes to their financial instruments accounting by 3 years, may have been delayed by an additional year, but they’ve not gone away. With so much to do and so many complex hurdles to overcome, to stand still is to fall behind.

IFRS 17 brings huge change for the insurance industry. This new accounting standard will require companies to transform their accounting systems, processes, data and governance. Over the past few months there has been much focus on how IFRS 17 will require finance and actuarial platforms to be transformed. When one thinks traditionally about tax, many only consider the impacts on the numbers and tax calculations in the financial statements and tax returns. However, if a company is making changes to its finance systems, the data it gathers, its controls framework, etc., it is likely there will also be a big impact on the tax function.

“With great power, comes great responsibility” - words that may mean more to some than others, but which resonate more than ever in today’s world of big data and sophisticated analytics. While the power of data and analytics have been utilised by financial services for decades, the Financial Conduct Authority’s priority focus on vulnerable customers and its expectation of firms has sparked a shift in its use. Firms are now starting to use the power of data to help identify customer behaviours and potential vulnerabilities. Such a detailed understanding of customers is without a doubt very useful, but with this greater power of understanding, should firms be more socially responsible for their customers? And can a firm ever go too far in this regard?

I am looking forward to the 2018 RiskMinds International Conference. With so much change and uncertainty in the world, it feels like the perfect time to come together and explore what’s happening in our industry and what the future might hold. As the leader of PwC’s UK Financial Services Risk and Regulation (FSRR) practice, I have been having conversations with leaders in Financial Services across the last twelve months to understand their current pain points and future priorities. I’m looking forward to sharing these insights (as well as gaining new ones!) in my role as Chair of the CRO Forum.  

In a speech introducing the results of the FCA’s cross-sector survey of technology and cyber resilience, Megan Butler, Executive Director of Supervision, delivered a stark message:  firms must be braced for more IT and cyber incidents and do more to address the threats adequately.

As firms prepare for Brexit, they should take into account the consultation papers published by the Bank of England (BoE) on 25 October 2018 in their ongoing internal capital adequacy assessment process (ICAAP) and internal liquidity adequacy assessment process (ILAAP) preparations.

As the Basel Committee on Banking Supervision (BCBS) and the national regulators across the world continue to be increasingly intrusive, prescriptive and challenging of firms’ data requirements, the need for firms to undertake infrastructure and technology enhancements to upgrade their data management systems and processes intensifies.

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.