Sturgeon Ventures discusses the merits of the Chartered Institute of Securities and Investments learning from the last 30 years to face the next following Nikhil Rathi’s Speech’s highlights
Nikhil Rathi Chief Executive of the Financial Conduct Authority (FCA) delivered a speech to the members at the CISI 30th Anniversary Dinner last month, highlighting many important points for the industry to be aware of.
Drafted Speech from Nikhil Rathi, Chief Executive of CISI, delivered on 5th May 2022
- We are more resilient to the economic and geopolitical disruptions of today.
- Digital skills will be integrated in all future financial services education as the boundaries become blurred between tech and the industry.
- Along with other regulators, we are working on maximising the benefits to consumers of tech, while mitigating the risks.
- We need a boost to financial education as children are beginning to participate in cryptoassets.
Resilience and standards
If we cast our minds back to 30 years ago, when this esteemed institution [CISI] was formed, the UK was facing several economic and political upheavals – not least crashing out of the Exchange Rate Mechanism.
Today, we face an avalanche of economic and geopolitical disruption but we are more resilient and better prepared.
That agility in the face of upheaval is thanks to better infrastructure underpinning our global markets.
A core part of that infrastructure is the common professional standards and codes which are drawn on by firms working across borders and by nations building financial hubs.
CISI plays an incredibly important role here, often below the radar, in helping to boost the development of education and skills, whether that is by supporting regulators who are building capacity in emerging markets or by providing training for newly arrived colleagues in the City of London.
That need for consistent standards has only increased while we live through two dislocating experiences – the pandemic and the tragic consequences of Russia’s invasion of Ukraine.
Transformation and digital challenges
And at the FCA, we too have been transforming to meet these and other challenges. One area where we are growing our expertise is in the digital field.
Now I think of myself as not too bad with technology.
I can find my way around a games console and use Apple Pay for my Tube journeys to work.
I tried unsuccessfully to learn to code – as I think coding is a life skill and will become essential for everyone working in financial services.
My then eight year old tried to teach me but very soon lost patience with how slow I was.
Perhaps, later tonight, someone at CISI could be kind enough to point me to an appropriate course to rival his BBC Bitesize one.
These digital skills are vital for both CISI members and FCA staff as the lines between tech firms and financial services have become ever more blurred.
As regulators, the remit we face is poised to broaden as tech companies become more involved in distributing and promoting financial products.
Every course CISI offers in future – and every module of training our own staff at the FCA undertake – will have an element of digital upskilling.
We too are boosting our capabilities in this field with a recruitment drive for data analysts and scientists.
Digital Regulation Cooperation Forum
That’s why we have come together with our partners at the Competition and Markets Authority, the Information Commissioner’s Office and Ofcom to form a Digital Regulation Cooperation Forum (DRCF).
And a key element of our cooperation will be building digital regulatory skills across all the major UK regulators.
We have seen the vast potential benefits of increased digitalisation, which we need to realise whilst mitigating risks.
As regulators, we need to make sure they benefit consumers, businesses and protect market integrity
Last week, the DRCF set out our action plan for the year, which includes protecting children online, relevant for the FCA as we are seeing ever younger participants in new financial products such as cryptoassets.
We have heard of children dabbling in crypto after being bombarded with promotions on social media.
Yet many young people are wading in before they have even basics levels of financial literacy.
This is another field where training and education is essential.
Competitiveness and markets
Next week, the FCA will host a CryptoSprint event, which has attracted hundreds of applications from firms.
We have drawn together experts to help thrash out solutions to problems such as, where are the gaps in the regulatory framework that need to be filled to protect consumers and markets whilst still supporting innovation?
We will also look at what protections can be offered against the loss or misuse of keys and cryptowallets.
This event, along with our rapid action on listings reform, has seen us embark on the most far-reaching changes to capital raising in the UK for two decades.
Along with our globally copied Innovation Hub, these are just some of the ways we are attracting the brightest and best to the UK.
Environmental, social and governance (ESG)
Technology and training are also essential in the field of ESG development.
I was fascinated to hear recently that the Big Four are now running their own ESG training for staff and in some cases clients. We want to build that capability as well. And Artificial Intelligence including automation will increasingly play a role in financial services.
That is why, we and the Bank of England have set up the Artificial Intelligence Public Private Forum.
AI can amplify risk as well as benefits. For example, you only need some data to be inaccurate or skewed for customers to be unfairly profiled as high-risk and locked out of the market.
On the flip side, more accurate data can enable personalisation and that can lead to better deals for some customers.
Intelligent automation can also slash operational costs, with price reductions passed on to customers.
It is vital that this sector can harness the value of AI for the benefit of society at large, to consider the ethical and social dimensions of AI.
Diversity and inclusion
In order to capitalise on innovation in the next 30 years, we must also fully harness diversity and inclusion across financial services.
Too often, financial services organisations and leaders hire in their own image. We are changing internally at the FCA.
And we have warned the sector that firms that do not embrace diversity of thought will struggle to serve the needs of a diverse customer base and manage conduct risk effectively.
Screen sharing scams
Sometimes, we think we know so much that we are beyond further training.
That is clear with new research that the FCA unveiled today which shows how increasingly sophisticated tactics can fool even savvy investors.
In one year, we at the FCA have seen over 2,000 cases of screen sharing scams and victims have lost £25 million.
Today, we launched our ScamSmart campaign for screen sharing which aims to tackle this and direct investors to our official warnings list.
Looking to the future
Four years ago, your inhouse magazine wrote a profile of me. The headline was ‘the Sensible Optimist’.
I’m very proud to have graduated from being the subject of a sidebar article to being the guest of honour at this dinner in just four years.
I remain optimistic because I will never stop listening. And my colleagues and I will never stop learning.
Change is hard but we are listening to staff and we are also listening to the consumers, industries and governing bodies who need us to change, and change fast, so we can perform better and meet the challenges of the future.
Our people are our greatest resource and we believe we offer what is possibly the best package among UK regulators, with competitive pay and strong rewards for consistent performance and greater opportunity for career mobility.
We have paid particular attention to the pressures faced by our lowest paid colleagues.
In a highly competitive recruitment environment, we have attracted hundreds of new colleagues this year at all levels and look forward to dozens more joining us in the months ahead.
We strongly believe in development and training, the mission of the CISI, so our colleagues can fulfil their potential and go on to achieve even greater thing.
Just 18 months after starting at the FCA, I have witnessed levels of change and transformation that I was told would be too challenging, even impossible, when I first took the role.
Much of that transformation has been brought about by learning from our past in order to look to our future.
We know we have much further to go to realise our vision of being a data-led regulator, embracing innovation and acting assertively and adaptively to tackle serious harm.
At their core, CISI and the FCA have a similar function: to boost knowledge, skills and steer professionals towards acting with integrity.
Here’s looking forward to both of our organisations continuing to strive to encourage that integrity, that knowledge, that constant self-improvement, over the next three decades.
Learning from the last 30 years to face the next: with www.cisi.org as our learning partner
Sturgeon Ventures renews its corporate sponsorship of the Chartered Institute of Securities and Investments
Clients, staff and the market recognise that CISI Corporate Supporters are leaders in quality, integrity and competence and are committed to supporting success in CISI qualifications and to fostering a culture of professional development for employees. We are proud of the service we offer our Corporate Supporters and committed to ensuring our products and benefits allow members to remain up to date with the latest trends, developments and regulatory requirements.
Simon Culhane, Chartered FCSI, Chief Executive, CISI
Seonaid Mackenzie is a regular speaker on financial services in local schools and often incorporates CISI courses within the students school curriculum. Together with information packs sent from the CISI, Seonaid offers students a window into the financial industry.
Sturgeon and its core team, together with its Certified Persons and AR Firms’ Approved Persons, are all members of the CISI. Since pioneering the terms Regulatory Incubation and Regulatory Hosting, Sturgeon believes that Competency and Integrity lie at the heart of being regulated in the United Kingdom. Long before the Senior Management & Certification Regime (SM&CR) Sturgeon and personnel were members of the CISI notching up the minimum CPD hours. Although not giving retail advice and therefore not needing Level 6 type training, individuals still benefit from external CPD accreditation with a test and certification at the end of the modules key to maintaining an audit trail. Some also become Chartered Members and are able to evidence high standards to their clients as their careers develop.
See link for listing: https://www.cisi.org/cisiweb2/cisi-website/integrity-ethics/corporate-supporters
The CISI website for further information: https://www.CISI.org