Independent Review of Risk Management Framework

Improving regulatoryregulatory relationship

Maintaining a good relationship with regulators is crucial for ensuring compliance, fostering trust, and facilitating smoother operations. But that is not all. It is key for firms to ensure their voice is heard when it comes to shaping future legislation and respond to consultations.

Overview of Topic

In the financial sector, supervision is a critical aspect, especially for banks, asset managers, commodity houses, and fintechs, with distinct regulatory bodies overseeing these entities in the UK and EU. In the UK, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) are the primary regulatory bodies. The FCA oversees conduct and compliance, while the PRA is responsible for the prudential regulation of banks, insurers, and major investment firms.

In the EU, supervision is more complex due to its multi-country structure. The European Central Bank (ECB) is pivotal in supervising significant banks under the Single Supervisory Mechanism (SSM). The European Securities and Markets Authority (ESMA) oversees securities markets and asset managers, while the European Banking Authority (EBA) focuses on consistent banking regulation and supervision.

A notable addition to the EU’s regulatory landscape is the Anti-Money Laundering Authority (AMLA). Established to strengthen the EU’s fight against money laundering and terrorist financing, AMLA enhances the coordination and consistency of anti-money laundering supervision across member states. This centralized body is expected to play a critical role in unifying and enhancing AML/CFT efforts across the EU.

For effective regulatory relationships, adherence to rules set by these bodies is essential, including transparency in operations and proactive engagement with regulators. Such a multifaceted approach helps maintain compliance, adapt to regulatory changes, and build a reputation as a responsible participant in the financial system.

Significance in Today's Landscape

Evolving Regulatory Landscape:

The financial sector is experiencing an evolving regulatory landscape with new rules and regulations being introduced in response to changing economic conditions, technological advancements, and lessons learned from financial crises. Having a good relationship with regulators helps banks stay abreast of these changes and understand the implications for their operations.

Increased Scrutiny:

In the aftermath of financial crises and scandals, regulatory authorities have intensified their scrutiny on banks to ensure financial stability and protect consumer interests. A positive relationship with regulators can facilitate a more constructive dialogue during such scrutiny.

Technological Advancements:

The rapid pace of technological advancement brings about new risks and challenges. Regulators can provide guidance on managing these risks, and a good relationship can facilitate better communication and understanding between banks and regulatory authorities on how to navigate the digital landscape.

Globalization of Financial Markets:

As financial markets become more interconnected globally, compliance with a diverse set of international and local regulations becomes more complex. A good relationship with regulators can aid in navigating this complexity and ensuring compliance across jurisdictions.

Consumer Protection:

There’s a growing emphasis on consumer protection and ensuring that financial institutions operate with transparency and integrity. A good relationship with regulators can help banks align their operations with these objectives, thereby enhancing trust and reputation.

Crisis Management:

During times of economic or financial crises, having a good relationship with regulators can be invaluable. It can facilitate timely and effective communication, which is crucial for managing crises and ensuring the continued stability and resilience of financial institutions.

Competitive Advantage:

A positive relationship with regulators can also serve as a competitive advantage. It can lead to a better reputation in the market, trust from customers, and potentially smoother operations with less regulatory friction, which can, in turn, contribute to better financial performance.

Sustainable Growth:

By aligning with regulatory expectations and receiving timely guidance, banks can make informed decisions that contribute to sustainable growth. It helps in building a foundation of compliance and risk management that supports long-term success.

Given these factors, it’s evident that fostering a good relationship with regulators is not merely a compliance requirement but a strategic imperative for banks in today’s complex and dynamic financial ecosystem.



All authorised firm in EU and UK

Asset Managers
Commodity House

How Can We Help?

Working with senior risk management consultants, or regulatory liaison experts or risk specialist (credit risk specialists, market risk specialists, counterparty credit risk experts and other) we can deliver the below:

The following steps can summarise it:


Self Assessment

Our specialist regulatory subject matter experts can conduct an independent assessment of regulatory compliance with regulatory rules, taking into account supervisory and management feedback. This could also involve some benchmarking against best practice.
Our senior compliance and regulatory officers can also set up best practice template and training sessions if required.


Mock Regulatory Exams

Our regulatory experts can conduct mock regulatory exams to prepare institutions for actual regulatory examinations and to identify areas of improvement.


Regulatory Advisory Services:

Our senior regulatory advisors can offer guidance on understanding and complying with the myriad of existing and emerging regulatory requirements – helping institutions interpret regulatory rules and their implications on business operations.


Compliance Management Services

Our compliance experts can design and implement robust compliance frameworks and controls to meet regulatory expectations. This could involve conducting compliance assessments and audits to identify gaps and provide recommendations for improvement.


Regulatory Liaison Services:

Acting as an intermediary between financial institutions and regulatory bodies to facilitate better communication and understanding is something our regulatory experts are very familiar with. 

Assisting in preparing for and responding to regulatory exams, inquiries, and investigations is also something our regulatory SMEs can support. 


Training and Awareness Programs:

Developing and delivering training programs to educate staff on regulatory requirements, compliance procedures, and best practices.

Raising awareness on the importance of regulatory compliance and fostering a culture of compliance within the institution.


Regulatory Reporting Assistance

Helping institutions with the preparation and submission of regulatory reports accurately and timely.

Providing tools and technologies to automate and streamline regulatory reporting processes.

Actively participating in industry consultations and providing feedback on proposed regulatory changes.

Building relationships with policymakers and regulatory bodies to stay informed and influence policy development.

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