fca business plan and outlook 2015/16 - bovill briefing

FCA Business Plan 2015/16

Outlook changeable …

Bovill Briefing

April 2015

Richard Scrivener and Mike Booth

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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?

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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

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promoted

relegated

Key words in this year’s plan

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• 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

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“Putting customers at the heart of your business”

• Conflicts of interest and inducements remains an issue

• Risk management not risk avoidance


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• Post-authorisation review of funds due later in 2015

• Asset management market study due next year


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• 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


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• Technology

• Market access

• Protection and resilience

• Complexity – business as usual


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• Financial crime – greater focus, especially AML and

ABC

• Remuneration and performance management

remains important


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• Consumer credit – all about affordability

• Flexibility of regulatory resource


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RISK

• Greater focus on pensions

• Reforms

• Limited information to

shop around

• Scams

New(ish) stuff

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• MMR – post implementation review planned

• Concurrency powers with CMA

New(ish) stuff

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• Emerging distribution models – market study planned

• Shadow banking – increasing interest

New(ish) stuff

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• 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

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Market studies vs thematic reviews

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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

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Questions?

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What do we think?

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“Success is the ability

to go from failure to

failure without losing

your enthusiasm”

What it means for you

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• 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 …