Simoney Kyriakou  

How should regulators respond to scandal?

Simoney Kyriakou

Simoney Kyriakou

Amid all this noise and public uproar over what is seen as yet more proof that financial services has it in for the ordinary guy and only protects the cabal of the rich and powerful, it is easy for the public’s perceptions to fall down the social media rabbit hole. 

The public can all too easily forget the great work of the FinCen papers in uncovering bad practice is evidence of two truths.

The first of these truths is that the mainstream news media is a defender of truth and an exposer of malfeasance, not an untrustworthy tool of the state. While most papers have a political bent or a philosophical leaning one way or the other, we do take great pains to make sure that what we report is fair, accurate and not misleading. 

The second truth is that financial regulation in the UK is definitely imperfect. Its scope is not holistic, its powers not unlimited and its decisions are not always right.

Take a look at the Financial Advice Market Review, for example. Here was the Financial Conduct Authority’s chance to scope out the whole advisory market and make it stronger, more resilient, and find ways to get advice, guidance and education to the whole of the UK.

What has happened, in reality, is that a few robos have launched and either died a death or gone quiet, advice is still restricted to the more affluent, the professional indemnity insurance market is problematic to say the least, and the compensation scheme lifeboat is not funded as effectively as it should be, nor working in the way it had been intended. 

That said, the FCA has been instrumental in rooting out bad practice, taking action against bad practice, creating campaigns to counteract UK scammers and even going to the courts to bring test cases so that business owners do not end up disenfranchised by their insurers. 

So while it is important for the Treasury Committee to ask questions of the FCA as to why dirty money was allowed to pass by under its very nose, it is also important that financial services companies work with the FCA and respond to its consultations and calls for input. 

Engage with policymakers in a clear and productive fashion, suggesting ways to extend the scope of FAMR and make for a tougher, tighter, more effective (and cost-efficient) regulatory environment.

Rather than simply tweet about broken regulation, help to fix it. Show that you are part of the solution, not the problem. Call out bad behaviour and tighten processes to make sure your own businesses are squeaky clean and do not be afraid to showcase your best practice.