Post on 29-Jul-2015
FCA Business Plan 2015/16
Outlook changeable …
Bovill Briefing
April 2015
Richard Scrivener and Mike Booth
2
Overview
• Continuing common themes
• New(ish) interests
• How the FCA operates
• What do we think?
• What it means for you
Which of these terms is actually taken from the Business Plan?
3
shadow
banking
big data
hacktivists
large back-books
cyber-crime
FAB
VFM concurrency
powers
gatekeepers
in too deep
selling England by
the pound
Medium to long term, continuing risks
• Technology
• Culture
• Back-books
• Pensions
• Consumer credit culture
• Unfair Contract Terms
• SYSC in preventing financial crime
• Rapid house price growth
Outlook
4
promoted
relegated
Key words in this year’s plan
5
• Culture and controls
• Increasing complexity in business models is an issue
• Incentives for staff should drive right behaviour
• Act in the interests of existing, as well as new customers
Continuing common themes
6
“Putting customers at the heart of your business”
• Conflicts of interest and inducements remains an issue
• Risk management not risk avoidance
Continuing common themes
7
• Post-authorisation review of funds due later in 2015
• Asset management market study due next year
Continuing common themes
8
• Vulnerability – link to consumer behaviours
• Pension age
• Ageing population not catered for
• Not computer literate
• Unknown life expectancy and
financial needs
• Decumulation products mis-sold
• Young and in debt
Continuing common themes
9
• Technology
• Market access
• Protection and resilience
• Complexity – business as usual
Continuing common themes
10
• Financial crime – greater focus, especially AML and
ABC
• Remuneration and performance management
remains important
Continuing common themes
11
• Consumer credit – all about affordability
• Flexibility of regulatory resource
Continuing common themes
12
RISK
• Greater focus on pensions
• Reforms
• Limited information to
shop around
• Scams
New(ish) stuff
13
• MMR – post implementation review planned
• Concurrency powers with CMA
New(ish) stuff
14
• Emerging distribution models – market study planned
• Shadow banking – increasing interest
New(ish) stuff
15
• Risk Outlook no longer a separate
document to demonstrate how risk is
directly connected to activities
• One common view across the
organisation on key markets and
sectors
• Markets-led
• Thematic reviews versus market
studies, fewer more focussed
How the FCA operates
16
Market studies vs thematic reviews
17
Market study Thematic review
investigative and analytical forensic and supervisory in focus
industry-wide firm specific
competition and operation compliance and outcomes
information requests and some
visits
desk-based reviews and visits
report with findings and
recommendations
report to industry with good and
poor practice
changes to policy firm-specific actions
rule making s166 and enforcement referrals
• Reorganisation of supervision
• C3 and C4 firms – dropping the distinction
• Introducing Industry Education Programme
• Efficiency and effectiveness review – demonstrating VFM
How the FCA operates
18
Questions?
19
What do we think?
20
“Success is the ability
to go from failure to
failure without losing
your enthusiasm”
What it means for you
21
• Keep doing everything you’ve been doing over the last year, plus a
bit more …
• Review and improve your processes around
• conflicts
• inducements
• remuneration
• Question your firm’s culture; define it and write it down; how might
you test that everyone shares the right attitude to customers?
• Ensure conduct risk is embedded; make sure it’s tabled at the
Board
• Expect a thematic review …