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Industry Expert Q&A: Steve Bell, Regulatory Compliance Consultant, Senior Managers Regime

We spoke to Steve Bell, a market leading associate in our network who we recently placed on an Interim SMR assignment with Shawbrook Bank, about the key impacts of SMR regulation affecting the UK financial services industry.
                          

1. What did you consider to be the main challenges with implementing SMR into a UK Retail Deposit Taker?

The main challenge was to ensure coordination between the three core functions - Corporate Governance, HR and Compliance. All three have a major part to play in embedding SMR into operations and as the delivery lead, it is vital you leave the business with the assurance that they are working together effectively and compliantly. 

I would also say that management and planning was a key focus throughout implementation. You are dealing with senior stakeholders in the business who are extremely busy, therefore it was important to manage their availability so deadlines were met. Ideally you need to make a hire who encompasses both a solid project management background, the gravitas to deal with a firm’s most senior people and technical specialist knowledge. 

All organisations are different, so should initially be assessed to understand the size of the project. Through my experience with Shawbrook Bank, I found that recent changes in their senior management team, corporate governance arrangements and target operating model had a significant impact on how to embed the regulation. Larger firms with more complex structures can present even greater challenges to implementation.

 
2. As a specialist SMR consultant, how do you ensure you provide maximum value to clients, and ensure that a client doesn't remain reliant on you forever?

You must work alongside each of the three core functions and ensure the project is fully embedded into operations before you can begin to move away. Create and build the requirements, questioning who will be responsible throughout and then get them comfortable with their responsibilities with effective training.  Finally, be a safety net whilst they road test the new processes.

What works well is retaining some elements of the project infrastructure into business as usual.  Having a working group representing the three core functions meeting on a regular basis ensures ownership of SMR transfers from the consultant to the business enabling it to manage SMR compliance effectively. 


3. When should a client move away from relying on contractors for embedding SMR?

Ideally the specialist should be around for the first round of changes; these usually happen quite quickly through new hires or leavers. At this stage, the contractor should be there as an advice and support mechanism, typically for around a month after the build. 

If there haven't been any changes which help you test and measure implementation, create scenarios and question individuals on how they would deal with the situation. This phase is extremely important in ensuring the regulation has been effectively implemented. 

 
4. What are the main advantages to using an independent interim, compared to one of the Big 4 Consultancies?

The key thing to remember with using a consultancy is that there is a danger a ready-designed SMR Big 4 model will get 'squeezed' into your firms structure. This may not be the solution for your firm. However, bringing in a resource who can lead a project and work with your three core functions can ensure a more tailored and bespoke approach to the implementation process. 

Budgets can also be incredibly tight and you can save thousands on an interim solution. A useful method is to hire the right person who has all the necessary skills to do the heavy lifting and then use a major consultancy to check through their work and provide assurance. 

 

5. What are the most important technical capabilities that a high performing SMR professional should possess?

Regulatory Change - The ability to take a set of rules, whether it has come out of a consultation or policy statement, understand it and work out business requirements off the back of it.

Project Management - The ability to manage multiple work-streams and deadlines whilst also building relationships with key stakeholders. Understand dependencies so that requirements get delivered at the right time and in the right order.

Knowledge - Ideally you would have experience across Corporate Governance, HR and Compliance. The regulation encompasses all three functions and I believe an understanding of Corporate Governance requirements, HR processes such as recruitment and fitness and propriety, and knowledge of key regulatory sourcebooks such as SYSC are essential. 

 

6. What are the most important skills that a high performing SMR professional should possess?

Interpersonal skills - This project is cross-functional, so the ability to work with people operating in different parts of the business and fostering a collaborative approach across Corporate Governance, HR and Compliance is vital to the success of implementation.

Delivery - Organisation in ensuring the project is delivered on time and all deadlines are met.

Stakeholder Management - You must have the ability to perform at a senior level. If you aren't comfortable conversing with and managing very senior stakeholders you will find it difficult to deliver effectively. 

Communication and Training - The skills and confidence to present the regulation to Board members telling them who is accountable for which areas and the possible impacts if they do not fulfil their responsibilities.   The ability to lead key project meetings and deliver training sessions are also a major part of the role. 


 
7. What are the most important behaviours that a high performing SMR professional should possess?

Patience - Because you are operating at a senior level, flexibility is key. It is important to ensure completion and to meet deadlines, but gaining access to busy stakeholders can prove difficult. Here it is vital to stay focused and disciplined, maximising your time with them.

Professional - You are working alongside senior stakeholders, respect their time and deliver the project effectively. 

 

8. What is the ideal career profile of a high performing SMR professional?

As previously mentioned, solid experience across Corporate Governance, HR and Compliance is ideal in delivering a successful SMR project. It's a given that you possess the specialist knowledge, but during an interview stage apply the requirements to the firm’s particular situaton, this demonstrates you have taken the time to research their business in depth.

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