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Living With SMCR And The Directory- What’s Challenging Firms Right Now?

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Julie Pardy

Julie Pardy

With more than 30 years service in the Financial Services industry Julie has spent many years at the coal face undertaking a wide variety of roles in banking from Compliance to Sales, Operations to Training.

In recent weeks, Worksmart co-presented webinars on SM&CR for two of our trade association partners. In late October, we partnered with the Credit Services Association (CSA) to discuss the challenges of implementing and embedding SM&CR in their sector and, in early November, we invited members of the Investment Association (IA) to review their experiences of implementing SM&CR ‘one year on’.

Worksmart are regular contributors to webinars but have identified these two because they represent such diverse parts of financial services and in each, we conducted in-webinar polls of attendees’ views on different aspects of SM&CR. The polls provided some interesting insights into the industry’s experience.

SMCR Implementation Challenges IA

Using the graphic above, CSA and that sector’s experience of SM&CR in general, some things industry commentators expected to be challenging, e.g. updating employment contracts to reflect the new responsibilities expected of staff in Certification (14%) and managing the administration of governance committees (14% and 24%), were seen as less onerous than expected. The same was true of firms’ experience of evidencing senior managers’ duty of responsibility (18%).

When looking at challenges however, two themes clearly emerged. Firstly, approximately a third of firms identified resourcing (36%) and ownership (29%) issues of the entire SM&CR regime. Secondly, and related, were the challenges of managing the day to day activity of SM&CR, whether it be senior managers (ongoing management of statements of responsibility, 36%) or certification (managing the activities associated with fit and proper, 36%). Overall, almost two thirds of webinar attendees identified getting the volume of activity required by SM&CR completed on time (63%) to be a real challenge.

However, coming out of the detail and taking a more summary view, it is clear that assigning ownership for SM&CR and then subsequently having sufficient resource to administer it has, and is, continuing to prove a challenge for many firms in the consumer credit sector. Why this is firms’ experience is an interesting question, i.e. is SM&CR a genuine administrative burden or did firms simply underestimate the workload, is worthy of further investigation. However, if the views of webinar attendees are representative of their sector, SM&CR remains a significant ongoing responsibility and, for many firms, a challenge.       

SMCR & Directory, Implementation Challenges CSA

By contrast, although the IA discussed attendees’ experience of implementing SM&CR over the last year in general, the polling questions focused on the most immediate challenge of the directory. Whilst most felt very supported by senior management (91%) and almost half (48%) felt ready for ‘go live’, like their colleagues in the consumer credit sector, many felt the burden of administering the directory. Whether it was the challenge of tracking business changes (41%), being ready to provide updates of changes to the regulator within 7 days (36%) or the task of gathering the data required for managing the directory from disparate sources within their firm (61%), it was the challenge of administration that was most striking.

In summary, webinars identified administration as the single biggest challenge to successfully managing SM&CR in general and the directory specifically.

FCA

Using RegTech to drive full compliance with SM&CR

Administration: Of course, administration is exactly what our award-winning SM&CR and directory solution, Accord, is designed to do. Accord’s inbuilt workflow ensures activities are completed ‘to time and to standard’ and real time dashboards provide central teams with the reassurance of oversight of the entire process.

Culture Change: The regulator sees SM&CR as key to enabler to changing culture. By managing all the administration required by SM&CR, Accord also provides valuable information on culture and how it changes over time, e.g. challenges to fit and proper recommendations, competency assessments, reasonable steps records etc. Additionally, Accord’s inbuilt integration (API) capability enables a far broader dashboard to be built, e.g. upheld complaints, staff diversity, conduct rules training results etc.

Whilst no system is the ‘silver bullet for all ills’, Accord will solve the single biggest issue, i.e. administration, identified by both webinars.

 

For more information on how Accord could help your conformance with SM&CR and the directory, contact our friendly and knowledgeable team on: info@worksmart.co.uk

Or call us on: 01908 613613

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