Lessons of the Past

How Financial Services Firms Can Learn from the Lessons of the Past

By The Enforcd TeamThe Enforcd Team

Learning from the lessons of the past can help the financial services industry ride the rough regulatory waves of 2018.

Fear of failure. It’s something we all feel at one time or another, and it can hold us back from truly achieving our goals.

However, if we learn lessons from the past, failure can be one of the best teaching tools around.

In a world in which regulation is moving so quickly that firms can struggle to keep pace with, being able to learn from past examples can be crucial.

A difficult time

There’s no doubt that we are entering a challenging period for compliance managers.

The coming year will see a frantic schedule of new regulations with MiFiDII and GDPR leading the way. Each will have a major impact on the way financial services work.

This new environment is brought about by the fast-changing nature of the market. Technology changes the game, which means regulators are having to adapt quickly. However, this is a learning process for everyone which means there will be mistakes along the way, and that the rules will change still further.

Businesses will have to adapt, review and evolve to keep pace with the regulatory environment, while the regulators themselves will have to review their own rules to ensure they are appropriate for the digital economy.

Doing so is a massive challenge, and one not every company is ready for. You don’t have to look far to see signs of companies struggling to get ready in time.

A recent report found that half of businesses are not ready for GDPR in 2018 and that’s just one statistic. Depending on where you look, you’ll find research suggesting that anything between 40% and 90% of companies are struggling to become GDPR compliant. Such is the quantity of regulatory change coming that it may well be impossible for some companies to adapt quickly enough to all of them.

Learning lessons

What does this mean?

Well, inevitably, mistakes will be made. What counts is whether or not lessons are learnt.

Take the recent example of Paul Walter who was fined £60,000 for contravening a regulation in which either fix the price or give a misleading impression of supply or demand. However, had he read about the story of Michael Coscia who was fined for using very similar strategies he might have avoided this costly mistake.

How Enforcd can help

Enforcd helps financial services firms reduce the risk of making costly regulatory mistakes by embedding a strong compliance culture throughout their organisation.

In her speech at the FCA’s Enforcement Conference, Tracey McDermott said:

We need to re-evaluate not just the actions of the past but the cultures that underpinned them and the controls that failed to identify or manage the risks they created.

The Enforcd platform helps firms improve their culture by helping staff stay informed, identify and predict risk, and share best practice amongst their teams.

Had Paul Walter been an Enforcd subscriber, he would have read about Michael Coscia’s case, and he might have saved himself a substantial fine and avoided the inevitable impact on his reputation.

Michael Coscia

Our platform helps staff with compliance responsibilities manage the difficult task of collating and presenting regulatory information in a way that is easily accessed and interpreted. It’s a bit like a guiding light through the increasingly complex regulatory maze and ensures that the financial services industry can improve its practice by learning from its past mistakes.