Have a 2016 Action List? The FCA Does

The UK Financial Conduct Authority (FCA) has recently published its 2016-2017 Business Plan and Budget. The plan outlines the focus areas for the FCA for the coming year and details its annual budget. The FCA has established seven key focus areas for this year, covering pensions, financial crime, advice, wholesale financial markets, culture, innovation and technology and the treatment of existing customers.

Financial Crime

Unsurprisingly, financial crime remains a top priority for the FCA. The regulator has identified several principal activities in this area, including the launch of the new Financial Crime Annual Data Return and a drive to make optimal use of intelligence gathered from whistle-blowers in the financial industry.

Innovation and Technology

The FCA has stated that it sees technology as the foremost driver of change in the financial services industry. It also emphasised that firms must ensure that new technology benefits both the markets and consumers.

With this focus on technology and innovation, firms will look closely at procuring new back office systems for IFAs from technology firms such as Intelliflo (http://www.intelliflo.com/), in order to position themselves well in terms of compliance, market efficiency and security.

Culture and Governance

The culture within financial firms remains a concern for the FCA, as it believes that internal culture is the key reason for unacceptable risk-taking and financial sector failings. The FCA has dropped the idea of a banking culture review, and instead it is seeking ongoing discussions on culture and governance with individual organisations within the sector.

The FCA will continue to stress the importance of accountability at the individual level and to encourage responsibility for culture changes at senior management level. This drive will be aided by the Senior Managers & Certification Regime (AUTHORITY URL: https://www.fca.org.uk/static/documents/strengthening-accountability-in-banking-slides.pdf), which was introduced in March 2016.

Wholesale Financial Markets

The FCA is working towards the introduction of the Market Abuse Regulation (MAR), aimed at investigating market abuse cases more successfully than currently.

Another focus area within the wholesale financial markets will be to work with firms to identify and control conflicts of interest within the sector.

Its clear from the FCAs plan that the focus remains on tightening up controls around corporate culture, risk-taking and compliance. Robust internal strategies, with strong corporate policies and best-of-breed technology solutions, will be at the heart of these changes for firms in the financial services sector.