The Cost of Risky Business

Business Systems (UK)’s Richard Mill on how Workforce Optimisation (WFO) could be a big help for city firms attempting to meet the FCA’s Conduct Risk Agenda…

Today’s financial services market is all about how firms behave towards the customer, each other and the compliance agenda.

At the heart of this, in local compliance terms, is the Financial Conduct Authority (FCA) and its strictures – and at the heart of those strictures is its conduct risk agenda, set up to ensure traders always strive to do the right thing.

In 2016, Ernst & Young undertook a study of attitudes to conduct risk across the UK finance sector to find out how aligned organisations were with the main challenges of the Conduct Risk agenda. Its resulting study identified a general theme of deficiencies in data, monitoring and reporting. It found that respondents were struggling to take proactive steps to identify risks in behaviour or products, because there was no joined-up approach to monitoring quality assurance (QA) and service level metrics. Most worrying, performance is not monitored after point of sale, customer feedback is not used effectively, and there is no coordinated oversight across front and back office.

Without a doubt, firms should seek to promote good behaviour across all aspects of their organisation, and seek to develop a culture in which it is clear that there is no room for misconduct. The FCA is not suggesting that there is a single approved identikit way of managing this that will suit every organisation: rather, CEOs must develop their own Conduct Risk strategy that’s tailored to the specific risks they are exposed to, and which clearly aligns with the needs of their organisation. And to help, the FCA has set out five risk questions every city business is expected to answer. These questions aim to probe how you embed long term good business practice, and while wide-ranging, do provide useful things to consider:

● What proactive steps are you taking to identify conduct risks?
● How do you encourage people in not just the front, but the middle, back office, control and support functions to feel responsible for managing conduct?
● What support have you put in place to help your people improve their conduct?
● How does your firm’s board and executive committee get oversight of conduct?
● Has your organisation looked at any business activities it is engaged in that could be working to undermine your work in this area?

So there is a clear disconnect here. On the one hand, there is poor process visibility and a lack of linkage between front and back office, and on the other, the FCA challenge to do better.

To join the two up we need to deal with the lack of effective data and intelligence procedures,which represents a significant barrier to being able to answer any of the FCA’s five questions in the way the regulator is demanding.

How workforce optimisation can help you get across the FCA finishing line

The good news is that a tool is available that can address some of these issues. It’s called Workforce Optimisation (WFO) software, an approach that takes a data-led approach to streamlining operations and achieving greater efficiency, enabling firms to answer formally with evidence in order to demonstrate compliance with the FCA’s Agenda.

The ideal scenario is also to extend WFO from the front to the back office – allowing all operations to enjoy the benefits of greater efficiency and integration. A modern modular, highly flexible WFO solution will do just that: controlling and monitoring workflows through all parts of an organisation, integrating valuable data streams from disparate points, and bringing critical information together into a single management dashboard.

This capability makes it an ideal solution to help financial services organisations overcome those barriers to mitigating and tracking any conduct risk. Even better, implemented correctly WFO also provides clear, actionable intelligence on all areas related to service quality.

Given the regulator’s demands to create a successful regulatory agenda that promotes positive outcomes through better control of risk, a modern WFO platform could become a truly invaluable tool. Our first task in bringing behaviour and performance into line with established standards – and then keeping them at those levels – is genuine, data-driven, insight into what is happening across the organisation, as that’s ultimately the only way to make change stick.

The author is Managing Director of Business Systems (UK) Ltd, a specialist in providing call recording and workforce optimisation solutions. Visit