FCA: CIOs are the new rock stars of finance

The FCA has said high demand and short supply of quality chief information officers and IT consultants makes these professionals the new rock stars of finance, and also jeopardises IT change programmes.

Speaking at Bloomberg in London today FCA executive director of supervision – investment, wholesale and specialists Megan Butler (pictured) said the regulator is concerned about many finance firms’ overconfidence in their ability to deliver these projects: “We are worried that a lot of firms seem overly confident about their ability to manage flagship IT change programmes and keep their systems up to date.

“Twenty per cent of the incidents reported to us over the last 12 months were explicitly linked to weaknesses in change management, making it the most frequent cause of outages and implying a mismatch between corporate expectations and reality.”

Among the causes of this Butler said was the lack of experts to manage the programmes: “…we know there is a real problem at the moment around recruiting the right skills at the top level; to steer, set strategy and oversee this model.

“Historically, and for most of my career in this industry, the rock stars of finance were always the alpha traders. Today, it’s the CIOs and IT consultants who are in high demand and short supply. Meaning the best are difficult to employ and hard to retain. A challenge reflected by the fact that all the wholesale banks and asset managers we met after this survey said they were concerned about a shortage of cyber expertise.”

Butler emphasized the importance of a positive security culture, “with all your people acting as your eyes and ears.” She warned: “Even rock star CIOs can’t shoulder all the responsibility.”

In her speech Butler referred to the FCA’s findings of the cyber and technology resilience survey published today.

It states there has been a 138 per cent increase in technology outages reported to the FCA in the year to October.

Butler says although the regulator supports technology innovation the picture for tech disruption looks bleak: “On the basis of the data that the FCA is currently collecting, we see no immediate end in sight to the escalation in tech and cyber incidents that are effecting UK financial services.”

Close to 300 firms were surveyed for a cross sector report, with data collected on trends in governance, cyber defence security and delivery of change management.

The findings show smaller firms continue to struggle more with technology than their larger peers and are also more likely to lack CIO-style roles.

Report figures show a quarter do not have a board-approved information security strategy and 16 per cent lack a board member or executive with specific responsibility for cyber resilience.

The report says: “Some boards struggle to understand that cyber is a global risk not just the responsibility of the IT department [and] bringing in external support is one way in which firms can address this challenge.

“Effective governance at senior levels is essential to creating an environment for effective resilience throughout an organisation, whatever its size.”

Figures show cyber-attacks have accounted for 18 per cent of operational incidents reported to the FCA for the 12 months to September 2018, while failed IT changes have accounted for 20 per cent.

Firms are also not reporting all major technology outages and cyber-attacks to the regulator as required.

The report says: “Evidence suggests that firms are under reporting and we remind all firms of their obligations to report.”

Issues around third party management are also prevalent, with IT failure at an important supplier accounting for 15 per cent of operational incidents reported.

Close to 80 per cent of respondents to the report sat they aren’t sure what information third parties hold, while half do not know what data they have access to.

Moving forwards, the FCA says third party management and change management are also set to be targeted more heavily in its supervisory plans for next year.



Fund giants hit with criticism for continuing losses on advice arms

In the wake of the RDR, the FCA introduced new rules to stop vertically-integrated firms “unreasonably” cross-subsidising advice losses with profits from fund management. While the latest figures show losses are mounting again at major provider-linked advice businesses, critics are questioning whether these rules are working. Vertically-integrated giants including Quilter (formerly Old Mutual), St James’s […]

AJ Bell valued at £600m as IPO nears

AJ Bell has announced the price range for its stock market float, as it plans to publish the full prospectus for the offer later today. With a price set between £1.54 and £1.66 per ordinary share, AJ Bell will have an implied market capitalisation of between £626m and £675m. Once the full details of the […]


John Lawson: We cannot keep failing on financial literacy

I recently had a very enjoyable night out with a group of advisers. We could not help talking shop and shared some horror stories of poor financial decisions we had heard people making. These included taking the tax-free lump sum out of a pension to put into a bank account, taking money out to repay […]


Auto-enrolment arrives but is it a done deal for small firms?

When business secretary Vince Cable told the Liberal Democrat party conference he had defeated the Tory “headbangers” who “find sacking people an aphrodisiac”, there was little doubt who he was thinking of – Adrian Beecroft. The Beecroft report, which was commissioned by the Government and published in October last year, contains a series of radical […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Are there rock stars in the world of regulation or, as I somewhat suspect, are its leading lights made of somewhat softer and smellier material?

  2. I have never heard such bull squirt in all my life
    The FCA is run by hipsters in hoodies….kids who don’t have a clue…… I think that thing that just flew out the window was the last little bit of respect I ever had for the FCA
    Not that they are worried what I think anyway I am just a dinosaur of a bygone era who needs to go and sit on a park bench and dribble into my hanky.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com