Risk and compliance video series: The 5 most important things to remember about regulator mandated reviews

John Coley

Hello and welcome to the latest in our series of risk and compliance videos. I'm John Coley and I'm here today with Christian Blackwell to talk about regulator mandated reviews.

So Christian, I guess a good starting point with this I guess from view is how you approach such a review and your mind set, so do you want to talk through your sort of key thoughts around that?

Christian Blackwell

That's really important and a key element. We should be being open and proactive, that's really important. Don't try and be evasive or argue a point unnecessarily. You have to remember why these reviews are in place, be it the FCA or the FRB or any other regulator. They are a tool used to try and gather more information about specific issues or a theme in the industry. So don't be frightened or intimidated, it's a process that they're doing through. The second is don't hide from it. Be proactive, really engage, engage a team early, get the right people around the business involved and don't shy away from it. If you are unsure about anything, ask questions. The regulator will not criticise you for trying to find out more information of what the scope is.

John Coley

And I guess within such reviews there can be lots of things going on. They could be information requests from regulators, requests for meetings, what should firms be really focusing on? What should they have at the top of their minds?

Christian Blackwell

Companies should focus on customer outcomes and that is what the regulators are focused on. So they should be focused on that. Don't try and argue detailed systems points or making excuses but thinking about how what they are doing day to day affects customers, will help them and if they can actually come up with ways of, creative ways of actually remediating issues that may have happened, that will benefit customers, regulators are likely to listen to that. 

John Coley

Going through a regulatory review, there can be a lot of things happening, you know it can be a bit emotional for some firms at times which is quite natural, so in the context of staying positive, how can firms best use these as a tool to improve themselves and make their firms as good as they can be?

Blackwell

I think there's a couple of things. I think you should choose your advisers very carefully and early in the process. People have been through this before with other firms. Companies that have a very good relationship with the regulator and can facilitate the tripartite discussions that need to take place. Also I think a key area which firms often they feel like this is being done to them but it's actually an opportunity if looked at in the right way. I think a firm, it's difficult to get a budget to get change quite often and this is an actual opportunity to more the business forward which will benefit both the business themselves if done rightly in more efficient processes and also ultimately better customer outcomes.