Client Success Story

Risk & Compliance Effectiveness

Background

Since N2, in response to the FSA Principle 3, the activity of adding new risks and controls to the risk database has dominated the style with which our client, a leading UK life insurance company, managed their operational risk. As a result our client had unfeasibly large numbers of risks recorded and even larger numbers of controls over these risks.

The Challenge

Our client urgently needed to re-evaluate their risk and control environment in order to ensure it is fit for purpose and not damaging to the customer experience. The sheer volume of controls and risk management had rendered their risk management systems ineffective.

The Solution

A 16 step review methodology from risk identification and prioritisation, through to tracking agreed management actions, was produced. The methodology focused review staff on identifying not just risk management control weaknesses, but also opportunities to improve processes and reduce or remove over-burdensome controls, in order to enhance the customer experience whilst at the same time achieving a compliant and operationally effective business.

Huntswood designed a new monitoring methodology that included existing best practice and combined this with a framework to support and champion both the internal and external customer experience, whilst maintaining compliance with the relevant regulatory bodies.

The Result

Production of the methodology was followed by a change management phase to embed the new approach throughout the division. The division is now able to report on the business’ performance in terms of numbers of risk management controls added, enhanced, reduced or removed. Achieving the link between risk management, process efficiency and the customer experience has also resulted in a re-focus on risk management as a key element to improving the customer experience, which has been followed by a series of operational ‘wins’ from both a firm and customer perspective.

Huntswood’s View

TCF and principle-based regulation (PBR) continues to challenge both regulator and regulated. In the new PBR world firms must develop the ability to define what principles mean to their businesses and the consumer outcomes these should achieve so that they can identify the commercial opportunity that PBR offers and build it into their strategy.

Making this strategy an operational reality means having staff with the skills, knowledge and tools to make change happen for the good of both customers and the businesses operational areas, who will each benefit from efficient, risk managed processes. Our methodology, which combines process efficiency, principle based risk management under and continuous improvement, offers wins for both firms and customers and also ensures a long term solution to the FSA’s consumer protection objective.