Benefitting From Business Accountability

Accountability and compliance have always been non-negotiables for any regulated financial services organisation in the UK. Reporting and demonstrating compliance with core regulations should be built into all operations. But business accountability, and the proof of this, is not always effective and is too often positioned as a burden. And as the quantity and scope of industry regulations and guidance issued each year continues to grow, many businesses find the burden gets increasingly complex and expensive.

Along with the growing calls for governance and ESG issues, the call for transparency from stakeholders outside of industry regulators has also grown louder. For businesses, this means reporting and evidencing that they are meeting not just core regulatory requirements but also social and ethical requirements on a far wider range of criteria. To meet this demand, and to make sure processes are fit for purpose and flexible enough to meet future challenges, there are calls for some fundamental operational changes.

In most businesses, large-scale operational change may inspire negative feelings. But ignoring the matter will not help either and may end up with businesses falling foul of the FCA. However, by adopting a proactive approach to continually building effective compliance into all areas of your business, it becomes part of the fabric and second nature. Instead of allowing progressive increases in regulation to slow down your company, it can be used as a springboard for a continual improvement programme that benefits the business, it’s customers, and key stakeholders.

When businesses are thinking about their operational model, they often look with some envy at the newer entrants in their industry. The start-ups and unicorns that have started from scratch with a clean slate and rocketed to success in a relatively short space of time.

So what can the rest of us learn from these newbies? In one way, they are not magical in that they are the result of a lot of hard work and determination, but so is every business. One thing they do all have on common is a singular direction and purpose to their business offering, which is something even the most complex and diverse businesses can learn from to push themselves and their business forward.

In my view the key aspect here is clarity. Clarity of purpose, which can be applied at divisional level as well as across the whole organisation. For more mature companies it’s about ensuring highly focussed business processes and the most efficient operational models, with like-minded partners that share your vision.

Mastering these enables your time to be freed up to drive the core value of your business and to take risks with innovation to your direct customers. It certainly is possible to support and develop your business with technical and specialist knowledge. It is definitely possible to ease your regulatory burden and create business-changing opportunities. This is the positive reality of being accountable, creative, and making your business work for you.

In my many years’ experience working in regulated businesses, the only constant is change. Albeit not usually on the scale we’ve seen over the last few years. And as regulated businesses know, those that stand still and do not flex and change with the world around them soon find themselves left behind and struggling for business.

The cost and complexity burden that regulation places on the financial services sector remains and has in fact increased with the raft of emergency and temporary measures introduced by both regulator and government to support the financial wellbeing of both consumers and businesses. It will only grow as the cost of living crisis continues and the FCA and other regulators work to ensure consumers are protected and supported by the businesses that serve them.

One such example of imminent change is the Consumer Duty from the FCA, which seeks to increase the requirement of financial services firms to always deliver good outcomes for customers, whether through tailored services, advice or suitable products built around the consumer.

Implementing any change programme can be nerve-wracking, but with clear objectives and the right support from both inside the business and external partners, the end results can have huge long-term benefits.