There is no doubt that the Financial Service sector has gone through fundamental change over the last ten years. Having worked in banking, insurance, and wealth & asset management and within each sector, I have experienced an increase in the costs of compliance. Perhaps it could be argued in no small part due to the poor practices of the past, the present and without changing the future. The other significant factor impacting businesses right now is how customers are managed and engaged with, but that the two are entangled when considering delivery


Compliance is there to not just to protect consumers but also firms and ultimately shareholders and therefore when embraced, can create competitive advantage. It is important to note that smaller firms cannot accommodate the increase in costs of systems to support compliance, together with the costs of oversight. And whether it is internal or an outsourced resource, senior managers are required to give focus to SMCR, albeit, arguing forcefully that this should be part of running a regulated business.


When considering the cost of compliance against the need to invest in more effective systems that are both internal and external facing to meet consumer demands and increased competition, there is a real danger that suppressed revenue and costs increases lead to a race to the bottom!


Businesses must, therefore, consider investing and staying independent, which will enhance competition. Which is one of the FCA’s key states of focus or they are consumed by consolidators which ultimately reduces consumers choice but allows owners to realise some of the benefits they have worked hard to achieve.


If there is a parallel, then you only need to look to our high streets where indecision has proved devastating for many high street brands.


Businesses should be thinking about the next five years and making sure they set out a clear strategy to ensure they have a real chance of still being around in the future