The FSA should use voice analysis software in its treating customers fairly phone interviews with small firms to save money and time, according to ex-regulator David Severn.
The former FSA head of retail investments and ex-Aifa director general says the software would reduce the £18m cost of the initiative, meaning that small firms would have to pay out less in fees.
He says: “If the regulator wants to get at those who really are not doing anything about TCF, then shouldn’t they consider the alternative idea of doing fewer visits but targeting more directly those who are not on target and have no intention of getting there. You can use voice analysis software as a means to an end.
“It is being used by some insurance companies when they check on claims so if it is being used already in financial services then why doesn’t the FSA consider it?”
Severn, who runs Severn Consulting, says as long as the regulator makes it clear that phone calls are being recorded, there is no reason why this technique should not be used.
But FSA head of investment in the small firms division Jonathan Fischel says it is not on the regulator’s agenda.
He says: “Under principle 11, we expect firms to be open and transparent with the regulator. We do need to iden-tify the firms that are not trying to engage with us but we are not looking at that sort of approach at this stage.”
Sifa managing director Ian Muirhead says the use of voice analysis software would be the “ultimate in underhand sneakiness”.
He says: “I find the idea that you are being put through a sort of interrogation by the regulator rather distasteful. It is too much Big Brother.”