| MCA warns that many financial services firms are ill-equipped to respond to new regulation |
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| | The Management
Consultancies
Association (MCA) has
warned in a new report,
The New Landscape for
Financial Services,
that many financial
services firms are
poorly equipped to
respond effectively to
extensive new regulation
emerging in the sector.
The MCA also calls on
the authorities to move
as quickly as possible
to secure an improved
and stable regulatory
environment, as this is
a key ingredient needed
for the return of trust
and confidence to the
sector.
The New Landscape
for Financial Services
identifies the key
challenges facing
financial services firms
in the wake of the
Turner Review, the
recent government White
Paper, the Walker Review
and other recent | |
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| | initiatives, and
recommends how firms can
respond.
Alan Leaman OBE, the
MCA’s chief executive,
said: “Many financial
services firms are
poorly equipped to
respond to the new wave
of regulation. Many lack
good governance,
processes and key
skills. IT systems are
critical, and will need
updating to meet the
future reporting
requirements of the
organisation and the
regulator. And financial
institutions must, while
undertaking all this
work, ensure that
standards of customer
service continue to
rise.
“Matters have been
made worse by the recent
tug-of-war between the
UK regulatory
authorities which has
harmed the sector and
Britain’s reputation. | |
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Getting
governance right –
ensure the voice of risk
is represented in the
boardroom.
Developing
risk mitigation
structures – elevate
the role of the risk
professional; employ
non-executive directors
with relevant financial
experience; rethink
pricing of internal
capital and products,
and pay structures.
Improving
data-management
capabilities – involve
the CIO from the outset;
employ systems which can
configure information at
the click of a button to
meet the organisation’s
and regulator’s needs.
Achieving the
right skills mix –
identify the new skills
required by the
regulatory agenda; | |
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| | tailor recruitment and
training programmes to
match these.
Dealing with
the regulator – involve
the regulator early;
ensure that an
individual is
responsible for and has
oversight of all of the
firm’s interactions with
the regulator; ensure
that the regulator
receives “one version of
the truth”.
Coping with
new competitors –
insulate your brand from
the damage created by
the financial crisis;
invest in innovation;
focus on customer’s
evolving needs.
Remaining
both cost efficient and
compliant – understand
which parts of the
business add the most
value; ensure that
projects are properly
co-ordinated; focus on | |
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| | Political uncertainty,
with the possibility
that a new government
might reopen many
issues, means that firms
must plan for further
change as well as
immediate reform. Our
plea is that the
authorities move as
quickly as possible to
secure an improved and
stable regulatory
environment; this is a
key ingredient if trust
and confidence are to
return.”
The MCA developed the
report with a team of
senior financial
services experts from
its member firms across
the consulting industry.
Key areas include:
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