Early warning systems: Helping to steer a safer course
| Pages | 151-156 |
| Date | 01 February 2000 |
| Published date | 01 February 2000 |
| DOI | https://doi.org/10.1108/eb025039 |
| Author | Allan Smith |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 8 Number 2
Early warning systems: Helping to steer a
safer course
Allan Smith
Received (in revised form): 24th March, 2000
RFS Compliance (PIA), 2nd Floor, Murray House, 1 Royal Mint Court, London EC3N 4HH;
tel:
+
44
(20) 7977 7000; fax: +
44
(20) 7977 4616; e-mail: allan.smith@barclays.net
Allan Smith is a graduate of UMIST (Man-
agement Sciences) and a Chartered
Accountant. Allan is Head of Field
Monitor-
ing and Investigations at Barclays Retail
Financial Services and was previously
manager of the Investigations and Recov-
eries Unit at the Investors Compensation
Scheme.
ABSTRACT
In this paper, the author examines the steps
that Barclays Retail Financial Services has
taken over the last few years to help identify
potential risk to investors at an earlier stage.
Barclays Bank plc is regulated by the Personal
Investment Authority (PIA) and has a regu-
lated
sales force of
around
1,000.
INTRODUCTION
Striking the right balance between
growth, innovation and profits on the
one hand and the number and type of
controls on the other hand is one of the
big challenges that most firms face. In
the financial services industry this chal-
lenge is being brought more sharply into
focus with the evolving face of regulation
and the increased emphasis on prevention
and a 'lighter touch for well managed
firms'.
The main background and drivers
behind the need for 'early warning sys-
tems'
is summarised by the following
four points:
— prevention is better than cure
— the Financial Services Authority (FSA)
appears to be moving towards making
directors and senior managers more
clearly responsible for a firm's compli-
ance standards
— individual registration and proposed
'approved persons' regime then makes
directors and senior managers directly
accountable to the regulators
— irrespective of the above three points a
firm is required to demonstrate that it
maintains ongoing monitoring of
compliance arrangements within its
business activities.
Taken together, all this leads to a need
for effective management of risk to inves-
tors across a business. This, in turn,
depends upon the availability of relevant,
reliable and timely compliance risk man-
agement information (in other words, any
information which allows the firm to
gauge or anticipate investor risk). The
difficulty, however, is translating this
theory into a practical approach that
works for individual firms. Therefore, in
this paper the author outlines three early
warning systems and how these have
been developed and then harnessed to
help improve the efficiency of controls by
identifying risks to investors at an earlier
stage.
Journal of Financial Regulation
and Compliance. Vol. 8. No. 2,
2000.
pp. 151-156
© Henry Stewart Publications,
1358-1988
Page 151
To continue reading
Request your trial