What are their
future compliance
challenges?

Things are about to get a lot more complicated for anyone subject to the regime because the FCA
analysis was limited to specific documents from a sample of firms and for a snapshot in time.

It did not interrogate the dynamic elements of each business that have moved on since the firms went live in March 2016.

Statements of Responsibilities and Management Responsibilities Maps must be accurate for any date in the past, but when departments are modified, created or dissolved, the structure of an organisation changes.

Historical variations in reporting lines across geographical and departmental boundaries also need to be traced.

Permanent leavers, new starters and temporary suspensions must be reported with Handover Certificates.

Relinquished, new and modified roles and responsibilities must be accounted for and the acquisition or disposition of a business would require compliance frameworks to be merged.

Add to this the introduction of the Certification Regime, Conduct Rules and Duty of Responsibility and it’s easy to see why accountable executives are feeling nervous.

Many have chosen to rely on manual solutions created by management consultants or temporary staff and underpinned by spreadsheets, ink signatures and document repositories.

Whether through meetings, emails, phone calls, spreadsheets or data extraction, gathering accurate compliance information can be a time consuming, frustrating and costly process.

  • In most firms data is distributed across an array of systems, making it difficult to get hold of.
  • Anything kept on a spreadsheet is at risk of being overwritten with limited scope for real time analysis or historical audit.
  • Status and priority measurements can be inconsistent making genuine problems hard to identify.
  • Unnecessary time can be spent writing emails, organising meetings and sending text messages.
  • Careless typing could direct emailed reports to an unintended audience and inadequate security measures could even put them into the wrong hands.
  • When the data is finally presented it is often obsolete due to the monthly reporting cycle.
  • Significant costs can be incurred running a team of well paid individuals to collate, analyse and document reporting data before they leave, taking critical knowledge with them.

The regulator is likely to come down hard on any person who wilfully contravenes the rules or does not make an effort to build a sustainable compliance framework.

Senior managers should bear this in mind because compliance is binary and it only takes one mistake to fail.

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