FCA: We Want Healthier Culture in Financial Services Industry

In a report outlining its plans for the next year, the British regulator also said it wants improved cybersecurity measures

Amidst a fog of never-ending Brexit uncertainty, the Financial Conduct Authority (FCA) issued a statement this Wednesday outlining its priorities for the next twelve months.

As one would expect, the regulator said its main goal for the coming year would be to ensure that the UK’s financial sector transition out of the European Union goes as smoothly as possible.

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A part of that will mean the regulator looks at how Britain’s departure from the international body will affect retail customers in the UK. The FCA also said that it would be looking to solidify ties with other regulators post-Brexit.

But, as crazy as it may sound, the financial regulator does have concerns beyond Brexit.

Improving Culture

For one thing, the FCA said that it would be strengthening its Senior Managers and Certification Regime. This regulation effectively makes executives in management positions accountable for any poor behavior at their firms.

More nebulously, Britain’s financial watchdog said it would be “exploring the role of purpose in culture.” Is the FCA a sixth-former writing an essay in postmodernism? Fortunately not. This strange terminology pertains to working culture in the financial services industry.

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Over the past year, in particular, executives at the regulator have made noises about understanding how ‘purpose’ influences a company’s behavior.

A more virtuous purpose will, according to the FCA, make for a better company and happier customers. It appears that, like Jebediah Springfield, the FCA believes a noble spirit embiggens the smallest man.

Defending online attacks, finding criminals

On the operational side of things, the FCA also laid a heavy emphasis on cybersecurity.

The British regulator noted that it would be building on existing ethical hacking procedures. It also said that it would be working on cybersecurity supervisory processes and emphasizing the need for solid cyber-attack defenses at smaller companies.

Lastly, the FCA highlighted its plans for tackling money laundering and other forms of financial crime.

The suggestions put forward by the regulator were sensible but not groundbreaking.

They included using more data to tackle fraud and bolstering existing partnerships with bodies that the FCA works with to defeat financial crime.

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