uk-flag-aleks-marinkovic-RaJJDlGu0x8-unsplash

How SMCR Can Affect The Credibility Of UK’s Financial Industry

UK clients have lost confidence in the financial services industry brought on by crisis and misconduct issues as shown by a study made by PricewaterhouseCoopers. The same study states that digital technology can be the turning point in re-establishing credibility. Technology has had a dramatic impact on people’s lives and it has changed every aspect of their existence including how they handle finances. As more consumers shift to mobile banking, financial institutions are faced with additional challenges in compliance especially after the roll-out of the Senior Managers and Certification Regime (SMCR).

From our partners:

cyberpogo

SMCR Defined

What is SMCR? It’s the UK regulators’ effort to strengthen the culture, governance, and accountability of all financial services firms. It is meant to hinder malpractice by making individuals accountable. Senior managers are expected to be regulator-approved, sign on to a statement of responsibilities that details everything they are accountable for and can be held responsible for any form of malfeasance. SMCR also requires firms to certify key employees for fitness and propriety. All employees involved in regulated activities are expected to observe a code of conduct.

Difficulties Confronting Financial Firms

As clients opting for digital banking are increasing, so do online records of all transactions and communications. The growth is exponential as you add in website content, which continues to evolve through the years. All these contribute to an increased risk of non-compliance. With the additional requirements of SMCR on top of other regulations, financial companies are constrained to hire new employees that can fulfill the requisites set by SMCR as well as those from other regulatory boards as adding regulatory responsibilities to existing employees may create an untenable work environment. Digitization also means an increase in data. To always be audit-ready, all the information collected by a financial enterprise must easily be accessed.

LEARN MORE  Hong Kong : The 20th Anniversary Of The Handover

Possible Solutions

Employee education and training are the best ways to be compliant. Change can be difficult, but continuous learning will make observance of the regime natural. Deloitte suggests that internal audits play a critical role as financial enterprises cope with regulatory pressure. Fintech can also provide solutions for the challenges. Fintech has the capability to automate repetitive or clunky processes. It can shorten procedures that used to take weeks or months. This not only makes for happy customers. It can also provide the same streamlining to internal processes related to compliance.

Impact Of SMCR

Finextra reports that SMCR is generally off to a good start. There are indications that regulated companies are using SMCR as it’s intended — “to reinforce cultural and competency expectations and standards.” The enforcement side of SMCR has been pretty slow. Out of 34 investigations, there has only been a single instance of enforcing a fine. Despite this, many organisations have seen positive changes in individual behavior as “fitness and propriety requirements support higher professional standards and accountability.”

As financial institutions continue to maintain these high professional standards and accountability in light of SMCR, consumers will begin to trust them again. Happy and satisfied customers will of course mean more business for financial enterprises.



For enquiries, product placements, sponsorships, and collaborations, connect with us at [email protected]. We'd love to hear from you!



Our humans need coffee too! Your support is highly appreciated, thank you!
Total
0
Shares
Previous Article
train-rail-lucas-gallone-C_wAF4c9cfE-unsplash

How Future Trains Could Be Less Noisy

Next Article
nfl-iStock-508026066_rev-min

Technology And The Game: NFL Football

Related Posts
Total
0
Share