As the FCA has introduced swathes of new regulation since 2008, compliance has become an increasingly-prickly subject.
Expensive and time-consuming, yet unavoidable, each significant regulation in the past decade (RDR, MiFID II, etc) has meant a considerable amount of time and resource consumption for these authorised firms. And the road to regulation is rarely smooth, usually involving numerous consultations and potentially several delays.
To put things into perspective, the 2018 Cost of Compliance Survey by Thomson Reuters found 66% of financial services firms expect the cost of senior compliance personnel to increase with 61% forecasting their overall budget for compliance to increase significantly in the next year.
The yin-yang of reputation management: conduct and compliance
However, the issue is more complicated than just filing forms and ticking boxes. At the core of the FCA’s regulatory mission, is the focus on encouraging better practice throughout the financial services industry.
Stronger regulations and greater transparency have removed some of the cowboys from financial services but more can be done to improve business standards and customer protection. Instead of focusing on what they can’t do, business leaders are being encouraged to explore what they can do.
This has sparked a wave of improvement from financial services but more still needs to be done and business leaders need to recognise the wider reputation ramifications at play (hence the fast-approaching SM&CR)
To put it simply, the time for being reactive is over, firms need to be proactive as well.
Right now, everyone is talking about compliance but not many are talking about conduct which is what the FCA is really trying to target, tying directly into brand and reputation protection.
Strategies to avoid reputation damage
Reputation damage can come from a variety of sources whether it's an internal scandal, failure to meet regulation or an enraged customer making a claim. However, to make matters worse, in today's digital world an upset is almost always going to be amplified across social media and the news.
The answer to this? Prevention. We all know the saying 'prevention is better than cure' and when it comes to brand reputation nothing could be more true.
Prevention is about planning ahead and having the right initiatives in place to maintain your reputation should any challenge arise. It should come as no surprise that this very much plays into conduct and compliance. If you're a brand who truly holds yourself accountable, you'll monitor upcoming regulation, operate with best practice in mind and deploy solutions that enable this ahead of time.
A big part of this is to review your conduct and consider what initiatives you want to put in place to improve practice and minimise any future potential risk to your reputation.
How The MirrorWeb Platform can help
Satisfying a regulation's requirements is one thing, but how can firms take that vital extra?
For example, in the case of MiFID II, whilst firms can capture electronic communications and record them simply by taking screenshots or generating PDF's containing these records. They're missing the point of the regulation and also putting their reputation at risk by choosing a method that's not only inaccurate and error-prone, but it may not be legally admissible or even satisfy the regulation itself.
By adopting The MirrorWeb Platform (the UK's leading website and social archiving solution), financial services firms are going beyond compliance and successfully demonstrating their accountability. They now have accurate and immutable records of their websites and social media which are time-stamped in an ISO standard WARC file. Plus, they're searchable, can be replayed from any time, and best of all, the process is fully automated giving them peace of mind that they're capturing and archiving their communications.
Having a fit-for-purpose archiving solution, could be the difference between rescuing a firms reputation through good conduct and compliance, or instead, severely damaging brand reputation with huge fines inbound from the regulator.