Following the Rules

Today’s episode is a deep dive into the Financial Conduct Authority’s efforts to tackle finance workers’ misbehaviour outside of the day job. In it, I reveal that the FCA received 746 notifications of such misconduct amongst senior City staff in 2020 and 2021. Of those, 646 related to breaches of Covid restrictions. Together with today’s guests, we discuss the action the FCA is likely to take as a result of such behaviour, what finance firms should be doing now to better track and ultimately stamp out non-financial misconduct and plenty more in between. Penny Miller is a partner and Head of the Financial Services Regulatory practice at law firm Simmons & Simmons. Mark Turner is a managing director in the Financial Services Compliance and Regulation practice at risk consultancy Kroll. --- In response to the topics covered in this podcast, a spokesperson for the FCA said:  “We expect high standards of character and probity from those who work in the financial services industry. And we have shown our willingness to ban those who fall short, for example those guilty of serious sexual offences" “It is important to be clear about how our remit operates here," the spokesperson continued. "We take action where established non-financial misconduct reveals a person lacks fitness and properness to carry out a regulated function. The real measure of success is not just ensuring enforcement action is taken in appropriate cases but that firms themselves have raised the conduct bar to ensure high standards of fitness and properness exist among staff.”

Today’s guest details what finance bosses should be doing now to better manage future compliance crises. He reveals what he really wants from his senior compliance executives and the common mistakes those in that role make when interacting with top bosses at any business. He details what UK lawmakers missed when it came to post-Brexit reform of the City and why there’s nothing to be gained from paying too much attention to political turmoil. Martin Gilbert is a City veteran with a long history in asset and wealth management. He co-founded Aberdeen Asset Management in 1983 and was its chief executive officer from 1991 to 2017 when the firm combined with a rival to form Standard Aberdeen, now abrdn. Among other directorships, he has chaired challenger bank Revolut since 2020 and asset management business AssetCo since 2021.

Today’s guest warns that the compliance sector risks a major skills shortage in its junior ranks. He reveals why the majority of regulatory technology solutions can not live up to their promise. He unpicks the compliance challenge created by the increasing regulatory focus on environmental, social and governance matters and he outlines the skills he looks for when hiring compliance professionals in a rapidly-changing sector. Richard Brearley has spent almost 30 years helping to shape or navigate financial regulation. His career includes four years as a regulator in the markets division of the Financial Conduct Authority’s predecessor the Financial Services Authority, and 16 years in senior compliance roles at large funds and banks. Since 2021, he has led the compliance division at global investment manager Ninety One.

Today’s guest outlines the vast compliance challenges that financial services companies with a European presence must tackle to ready themselves for the world’s first far-reaching set of rules specifically targeting the development and use of artificial intelligence. She warns that more than 80% of finance firms polled are currently ill-equipped to meet a number of the key requirements of the impending European rules. She explains why EU regulators will come down hard on those who are caught out when the rules come into effect and why – and when - the UK could seek to follow the European approach.   Charlotte Walker-Osborn has spent 24 years advising both suppliers and customers, including a number of banks and insurance firms, on their development, procurement, deployment and use of technology and for the past 5 or so years AI. Since 2017, she has led the artificial intelligence and technology sector at law-firm Eversheds Sutherland as its international head.

Today’s guest outlines how he believes the Financial Conduct Authority’s ever-expanding remit could impact its drive to become a data-led regulator. He reveals some common mistakes financial services firms make when interacting with the watchdog. He explains why he thinks the UK's asset management regulatory framework could benefit from a fundamental rethink as lawmakers reshape the UK’s rulebook post-Brexit and he warns City bosses they risk serious fall-out if they do not act now to adequately manage their operational risk.  These are subjects close to his heart because Nick Miller was the FCA’s head of asset management supervision for five years until early 2022. Since then, he has led Moody’s global regulatory affairs team as its managing director.

Today’s guests lays out the case for an ambitious clampdown on economic crime and the way it is currently policed in the UK. He calls out UK regulators for their lack of proactiveness in addressing the issue and calls on financial services execs to help him shape the best possible path forward to rid London of its dirty money problem. Kevin Hollinrake is a member of the British parliament for the ruling Conservative party and the Chair of the All Party Parliamentary Group on Fair Business Banking.

Smarsh is a US-headquartered technology firm providing global financial services companies with the tools to capture, store, and monitor their digital communications for compliance purposes and to glean useful insights. Today’s guests explain why regulators are right to be concerned about finance execs use of encrypted messaging apps like WhatsApp and WeChat. They discuss what communications behaviour they think the world’s finance watchdogs should be looking to next and they outline how the world’s largest companies are navigating the challenges of monitoring employees’ mobile conversations. Blane Warrene is vice president of product management at Smarsh, and Guy Levit is CEO of TeleMessage, a technology firm that Smarsh recently entered into an agreement to acquire, which captures mobile messaging data.

Today’s guests details how the ongoing war in Ukraine could fundamentally change the established business models and regulatory policy-making in Western financial markets, lays out the defence for central banks in their response to the inflationary scenarios that the outbreak of war has contributed to and sounds the alarm on the market risks that policymakers are forced to ignore whilst they are in crisis mode. Andreas Dombret is the former vice-chairman of Bank of America’s Global Investment Banking unit in Europe, the Middle East and Africa. More recently, he has been a member of the executive board of the Deutsche Bundesbank, with Banking Supervision, and Risk Control among his responsibilities. He has also been a member of the Basel Committee on Banking Supervision, the board of the Single Supervisory Mechanism of the European Central Bank and spent eight years on the board of Basel-based Bank for International Settlements.

Smarsh is a rapidly-growing technology firm providing financial services companies with the tools to capture, store, and monitor their communications. Today’s guests explain how the world’s largest companies are tracking staff behaviour and the alternative revenue-generating uses for the data collected as a result, outline the ethical guidelines they believe finance bosses should follow when monitoring employee communications, and detail finance firms’ efforts to monitor home-workers’ professional lives without encroaching too greatly into their personal space. Brandon Carl leads the commercial strategy for large-scale corporates as executive vice president in product strategy at Smarsh. Shaun Hurst is Smarsh’s principal regulatory advisor for Europe, the Middle East and Africa.

Today’s guests explains how financial services firms can best prepare now for the industry’s rapidly-changing compliance requirements, and outlines the skills compliance officers will need to remain relevant in the back office of the future. Louise Rodger is the director in the compliance and policy division at trade body the Association for Financial Markets in Europe, or AFME, where she lobbies policymakers for the interests of compliance professionals at banks and brokers in UK and Europe