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The Ostrich's Guide to FSA Compliance


We know it’s a problem, we’ve seen it this year – don’t comply, don’t look after your customers properly at your peril.  If you’re not going to play the game by the rules, be sure to put something by to cover the fines that will ensue. 

Since the FSA put its focus on a stronger consumer protection strategy a year ago, paying lip-service to the requirement to treat customers fairly will no longer satisfy an increasingly intrusive, their word, regulator. And it goes further with complaints handling, product development, handling of mortgage arrears, weasel worded loan agreements and products that don’t do what they say on the tin all being included in the FSA’s Hit List published in February in the Retail Conduct Risk Outlook. (Google and ye will find).

In short, “Just enough – Just in time” will not work anymore!  The result will be costly.  Ouch. And this really is just the beginning; this is not going to go away.

The newly forming Financial Conduct Authority (FCA) will oversee some 27,000 firms and will have powers to intervene at any stage of a number of processes including: product management and governance, complaints handling, the business model change resulting from switching commission from product providers to consumers (RDR), contract wording (especially for loans and mortgages) and the handling of arrears and collections. The overriding purpose of these interventions is to mitigate and correct actual, possible or potential adverse outcomes for consumers.  This ought to be the stuff of nightmares for any senior executives involved in product development, marketing, retail sales and distribution and customer service. The pain will belong to them all and no longer just be the burden of the compliance officer. Share and share alike. It’s only fair after all. So, what to do?

Wash. Rinse. Repeat. Pray.

A complicated manual approach worked last year, didn’t it? Your auditors will be happy to hold your hand (and your wallet) every year, and your IT staff won’t mind the numbing repetition of test-scripting procedures and nagging users. Just don’t tell your CEO and CFO that you’re depending on a manual process to keep them out of the regulatory and reputational mire.

My view is that this approach will no longer work over the longer term.  Not only is it an unnecessarily long, risky and arduous task to follow this eclectic route, it is locking the organisation into haemorrhaging far more staff time and consultancy fees than is necessary.  Furthermore, it is also ensuring that the organisation is forgoing the overall growth, competitive agility, and internal productivity benefits that spring from could be derived from a deeper technology solution such as taking a Business Process Management approach that will offer operational visibility and real-time process enhancement.


When you choose to tackle these compliance issues, and it is surely when rather than if, don’t just do it for auditors and regulators (although this will help you to sleep easier at night!).  Take your head out of the sand and do it for your customers, staff, and stakeholders.  Do it as a commercial programme to improve your customers’ experience and deepen their loyalty. Do it as an opportunity to anticipate regulation and make commercial progress whilst other are wondering how to patch their systems yet again. Do it leveraging one technology platform that can assure compliance today and tomorrow, as well as improve customer service and revenue and operational efficiency.

Such a platform, a single, unified technology platform, does exist.






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