The FCA’s Review of Retail Banking Business Models: Free-if-in-credit banking, vulnerable customers and the issue of overdraft charges

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Vulnerable consumers continue to be at the forefront of the FCA’s conduct agenda. While the FCA’s business plan for 2018/19 dropped consumer vulnerability as a cross-sector priority, our view is that this is not because vulnerability has become any less important to it. Rather, as explored in our recent stock take on the FCA’s approach to vulnerability, we see evidence that the FCA is embedding vulnerability into all aspects of its supervisory approach and programme of work.

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Posted on 14/05/2018 | 0 Comments

Innovation and data privacy: the ICO’s technology strategy 2018-21

Innovation

New technologies and evolving business models have required regulators to review their capabilities and respond to new risks posed. And the UK Information Commissioner’s Office (ICO) is no exception. The new General Data Protection Regulation (GDPR) has vested considerable powers to the ICO to regulate and supervise data privacy risks. Increasing concerns about the wholesale use and processing of personal data by firms are reflected in the ICO's recently published Technology Strategy, which outlines its objectives and focus areas through eight technology goals.

The ICO strategy’s leitmotif is that technological advances “need not come at the expense of data protection and privacy rights” and that “privacy and innovation are not mutually exclusive”. Through the development of its technology strategy, the ICO’s overall aim is to remain relevant by ensuring that the monitoring and understanding of technological change, and its impact on information rights, are a core component of its work going forward.

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Posted on 10/05/2018 | 0 Comments

Three trends that are redefining the back office

Back office

The back office is the engine of a financial institution. Until now, that’s meant structure, reliability, and efficiency - all things that are independent of revenue. But the competitive forces bearing down on financial services are also changing the way we ordinarily think about financial operations.

Here are three examples of what I mean.

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Posted on 09/05/2018 | 0 Comments

PS18/4: Credit Cards and Persistent Debt

Credit

This blog is aimed at credit card providers but has read across to other consumer credit firms such as debt purchasers, credit reference agencies, debt management companies and providers of free debt advice.

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Posted on 26/04/2018 | 0 Comments

Open-Source or Proprietary Software for Credit Risk: It’s all about asking the right questions

Open source

It is no secret that technology and its impact on companies’ business models is shaking up the general market. Technology disruption isn’t limited to media, retail, or transport (to name a few industries), but this disruption is widespread, also impacting financial services. The general theme is that technology enabled companies can execute quicker, cheaper and with greater precision.

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Posted on 25/04/2018 | 0 Comments

Pillar 2 Liquidity: Cashflow Mismatch Risk

Cashflow

Introduction

The PRA recently issued their policy statement on Pillar 2 Liquidity and have finalised the reporting requirements for Cashflow Mismatch Risk (CFMR). This followed the consultation papers released in May 2016 and July 2017. While the policy statement covers CFMR, franchise viability, intraday liquidity and other liquidity risks, this blog focuses on CFMR given the significant implications for firms.

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Posted on 19/04/2018 | 0 Comments

PRA Business Plan 2018/19

Swirl

The PRA published its Business Plan for 2018/2019 on 9 April 2018. The Business Plan, structured around the PRA’s eight core strategic goals, is cross-sectoral, outlining the work the PRA intends to undertake for the upcoming year across both banking and insurance sectors.

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Posted on 17/04/2018 | 0 Comments

FCA’s Business Plan 2018/19

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This blog provides an overview of the FCA’s 2018/19 Business Plan. It discusses the key cross-sector priorities the FCA identifies and compares them to those in the previous year’s business plan, noting dropped, changing and new priorities. It also outlines the FCA’s sector priorities for 2018/19.

Alongside the business plan, the FCA also published its 2018 Sector Views – the FCA’s annual analysis of how each sector is performing – covering retail banking, retail lending, general insurance and protection, pensions and retirement income, retail investments, investment management and wholesale financial markets.

Notably, the UK’s withdrawal from the EU is called out as a top priority, over and above any cross-sector or sector priorities. The FCA notes that they will have to dedicate extra resources to this programme of work, and that this will mean reduced activity in other areas as a result.

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Posted on 17/04/2018 | 0 Comments

FCA and PRA business plans: technological innovation remains a priority

Technological innovation remains a priority

Technology and innovation (“FinTech”) again featured prominently in this year’s Financial Conduct Authority (FCA) business plan. Andrew Bailey, Chief Executive of the FCA, remarked that “technology is supporting competition, transforming markets and changing the way consumers engage with them. […] creating a conveyor belt of risks and opportunity”. Given this, and despite the need for the FCA to dedicate a significant proportion of its resources to the UK’s withdrawal from the EU, FinTech was confirmed as a key priority for the FCA over the coming year. The two specific FinTech priorities highlighted in the business plan are: Innovation, big data, technology and competition and Data security, resilience and outsourcing.

The Prudential Regulation Authority (PRA)'s emphasis on technological innovation in its business plan is relatively less pronounced. Nevertheless, it too is exploring ways to innovate as a regulator, by continuously monitoring FinTech developments, and supporting the authorisation and supervision of new banks and insurers.

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Posted on 16/04/2018 | 0 Comments

Assessing value for money in investment funds

Investment funds

On 5 April 2018 the FCA published a policy statement, summarised in our recent blog, on its first round measures as part of its asset management market study. Particular interest has been generated by the new rules and prescribed responsibility this contains on assessing value for money. In this blog, we focus on these new rules and consider their implications for firms and senior managers.

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Posted on 16/04/2018 | 0 Comments