Designing a more effective and efficient compliance function

The challenge

Following a period of growth, a medium-sized UK-based high-cost short-term lender (HCSTL) and money services business had undergone a significant restructure. The business had also recently acquired an online lending business, which had been integrated into it’s branch based offering. This had led to a variance in standards and practices despite being under the same governance structure. The FCA was concerned that the pace of change had left our client’s compliance controls weak and that there wasn’t adequate oversight in place. It had imposed a deadline by which the firm’s compliance and quality monitoring activities needed to be strengthened.

Our approach

To remedy, we recommended a full assessment of the compliance function, highlighting any weaknesses or improvements to be made. A key aspect of this was to provide independent opinion on the adequacy of our client’s governance and oversight arrangements.

Initially, our consumer credit team spent time with the senior management team to gain a thorough understanding of the business model and to enable all regulatory requirements to be mapped to their activities.

We then reviewed the existing policies and procedures, highlighting gaps or weaknesses within the existing policy suite. Once new policies were drafted, or existing ones updated, any changes were consistently embedded and communicated, ensuring alignment with existing activity and training requirements.

We also reviewed the quality monitoring framework across the business. Our findings showed that the call monitoring process didn’t meet the lending and debt management requirements of CONC, so this was redesigned to incorporate the necessary standards.

As a result of the function assessment and redesign, the FCA was satisfied and the client was left with a compliance department that was more efficient and effective.

Outcomes

• Our relationship with the FCA meant we could maintain an open dialogue, which ensured quick approval of our plans and a shorter review time for our client
• Committed to adding value, we knew that knowledge transfer between our consumer credit experts and our client’s compliance team would set the function up for a successful and effective future.