Regulation and oversight – what a burden to business. That is the common expression financial services firms have as they respond to 220 regulatory change events around the world every business day. UK Senior Managers Certification Regime is the uber regulation that puts accountability, teeth, and enforcement to other regulations and risk management practices. But is it as bad as it seems? Let’s take a look at some of the positive outcomes that SMCR brings to the financial services organizations.

First some background . . .

Over the past few years, there has been a growing focus from financial regulators on accountability for risk, compliance, conduct, and control. Accountability upon senior managers, executives, and directors that makes these individuals personally responsible for the lack of due diligence or negligence in risk management, compliance, and controls. This started with the FCA and the UK’s SMCR and has since gone around the world in a spawn of similar regulations from other financial regulators:

  • Australia’s Banking Executive Accountability Regulation (BEAR)
  • Hong Kong’s Managers in Charge (MIC)
  • Ireland’s Senior Executive Accountability Regulation (SEAR)
  • Singapore’s Proposed Guidelines on Individual Accountability & Conduct

This list will continue to grow and expand as more regulators put greater emphasis on personal accountability upon individuals to ensure the financial services organization does everything it can to manage the conduct within the organization and ensure risk and compliance is properly managed.

Now to the positive . . .

The financial services organization can either see this as an inconvenience or embrace it as the way of the future and a method to drive greater performance in the organization, through layers of structured accountability and responsibility to ensure the organization reliably achieves with conduct that aligns with the integrity of the organization.

1) Accountability

The Polish poet, Stanislaw Lec, stated; “No snowflake in an avalanche ever feels responsible.” Too often . . .

[this is a guest blog authored by Michael Rasmussen of GRC 20/20 that can be found at SureCloud site, follow the link below to read more]

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