The FCA has seen a “sea change” in the attitudes of senior management to regulatory conduct, says FCA director of supervision Clive Adamson.
In a speech at the FCA’s general insurance conference in London yesterday, Adamson said that across the financial services industry conduct is now “very firmly on the agenda” of executive management and boards.
He said: “I have seen a sea change in the attention being paid to the conduct agenda. Two or three years ago, conduct was something that most firms thought of as a compliance issue and so delegated it to compliance functions.”
Adamson said this change in attitude is down to firms realising the cost of “getting it wrong” in terms of regulatory fines, redress costs and reputational damage.
But he stressed that the regulator continues to have high expectations for senior level governance.
Adamson said: “We are pleased that the conduct agenda is now more firmly at the board level.
“Our expectations though are high – although we are not expecting the board to approve every product as that would be both unrealistic and confuse their role with that of executive management, we do think that boards should understand how and where the firm makes money, what the conduct implications of that are, how customer outcomes are tracked across the product life-cycle as well as the more traditional oversight over control functions.”