Tougher regulatory demands

UK financial services organisations are facing an increasingly tough and uncertain regulatory environment, which many believe will curb strategic flexibility and undermine the country's future as a leading financial centre. Bankers taking part in the 2010 'Banana Skins' poll ranked political interference as the number one risk facing their sector and too much regulation at number three.

A particular challenge is the changing culture within the FSA, which is leading to more intensive and intrusive supervision. The influence of the Level 3 Committees within the EU is increasing and there may well be structural change within the national and international regulatory framework. With the possibility of even tougher controls ahead, the most successful institutions will be those best able to assess the impact of and plan how to adapt to a variety of potential regulatory scenarios. Smart firms will also be able capitalise on acquisition opportunities opened up by government-enforced divestment and turn strengthened compliance into competitive advantage in areas such as more efficient risk management and brand protection. For insurers, in particular, the move to Solvency II will be an opportunity to enhance capital efficiency and the basis for decision-making.

Our dedicated team of financial services regulatory experts are at the forefront of the debate over new regulation and are closely monitoring possible future developments. Their insight and expertise can help our clients to deal with the impact of new controls on their business model and group structures and develop a cost-efficient platform for compliance. This includes helping them to adapt to more intensive FSA supervision and the changing regulatory framework.