December 13, 2018

Surviving FCA regulation in a post-recession world

“Only the strong survive”. It may be a basic tenet of business, but the need to adapt and respond to change has never been greater for financial institutions.

Balancing increasing competition and customer demands with the need to meet a growing list of regulations is placing exceptional pressure on departmental resources. Some experts suggest meeting regulatory requirements alone now consumes 40% or more of a company’s IT budget.

Placing considerable pressure on banks in terms of labour costs and manpower, much of the focus of regulatory changes are based around improving the experience and security of customers. This has not only led to changes in commercial policy, but exploration into new ways to strengthen relationships with customers through the adoption of more customer-centric business models. Better relationships with customers should also improve the prospects of the business as well as adhering to the higher standards posed by the regulatory authorities.

Given the restrictive economy these changes will most certainly require cost-cutting and innovative use of new technologies and services to meet these higher standards. One effective approach, when done correctly, is the adoption of outsourced managed services to streamline processes, manage manpower, reduce costs and provide better data protection and disaster recovery planning (DRP).  

According to research by Technology Business Research, Inc. it’s a trend that’s likely to gain momentum too, with North American financial institutions likely to spend $73.8bn on IT improvements in 2014 as they switch from IT investments designed to ‘run the bank’ to investments focused on ‘changing the bank’.  

These changes will include servicing customers via mobile devices, and more effectively protecting customer data as well as tackling the growing problem of cyber crime. Part of improving service has to be a greater focus on business continuity and disaster recovery. Not only because of the crippling effect downtime has on customer satisfaction but also because of the six figure FCA fines that can – and have - been imposed on companies for compromising customer data and business functions. In 2012/13, the Financial Conduct Authority (FCA) levied a record £400m fines on financial organisations, representing a 450% increase on the previous year. In 2011, the UK operation of Zurich Financial Services was fined £2.3m by the FSA for losing the personal details of 46,000 customers.

Sending out a clear warning that compliance shouldn’t be taken lightly, Finance companies now need to build data protection into their process to show due diligence and meet regulatory compliance, while also juggling customer needs. And while there is “one size fits all” approach to choosing the best solution, one thing is certain. Meeting the operational and legislative needs of your business is going to be central to thriving in the post-recessionary world.

ABOUT DATAFORT

DATAFORT provides dependable and secure data protection services that offer enterprise-level functionality with a focus on security and reliability. Its software and services are used by thousands of organisations worldwide, ranging from SMBs through to large enterprises and local government departments. Every hour of every day someone, somewhere backs up with DATAFORT. The company was founded in 2000, is headquartered in Guildford, UK and has offices in London and New York. For further information please visit www.DATAFORT.com or call 0800 45 44 35.Guildford, UK and has offices in London and New York.

Press and analyst contacts:

Nabeel Qureshi
DATAFORT
01483 872 052