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Industry Expert Q&A: Kenneth Green, CASS Consultant

We spoke to Kenneth Green, a market leading associate in our network who we recently placed on an Interim CASS SME assignment with Mizuho International, about the key impacts of CASS regulation on financial services.                         

1. What do you consider to be the main challenges attached to CASS Oversight in relation to the governance of Third Party Administrators?

  
Old contracts and SLA's that were not written with CASS in mind, meaning that effective CASS oversight parameters may not have been included. This in turn causes push back from TPA's who attach (often significant) costs to doing work or making changes outside the SLA. TPA's often challenge requests because they don't believe it accurately reflects the rules, or that no other client has looked at something the same way. It is important to remember here that you can be pragmatic about what has been asked of the TPA, and their response, but it is your organisation that is accountable to the FCA for compliance. Therefore, take their response under considered advice but be sure that when you make the final decision and plan, it is because your organisation thinks it is the right thing to do.

Old and often complex systems that are not fully integrated, require manual intervention and cannot provide an accurate feed into your own systems.
Internal resourcing issues - unable to provide an effective oversight, including the expertise of relevant staff and the ability to interpret the information being provided by the TPA.

Lack of relevant, specific and good quality MI to help manage CASS risks.
  

2. How should a client blend their CASS Oversight team with permanent staff and contractors – and what does ‘good’ look like?
 

It's not so much about the blend between permanent and contractors, but the blend of experience that's important. The team needs to have people that are committed to the success of the programme and oversight model, regardless of their employment status. They also need to have the appropriate knowledge and experience. The person with ultimate CASS oversight should be confident that everyone in the team has the competence and capabilities to perform the tasks allocated to them and can take initiative to think quickly and decisively. Alongside this they should ensure that they are providing good leadership with a clear strategic vision on what the function is trying to achieve.

An ideal CASS oversight function would have a good leader with significant influence in the business to effect change; technical expertise, a preference for action, great record keeping & audit skills. They are confident in talking to the business to show that they understand what they are looking at, what it means and what the implications are of any issues identified. The team should also be comfortable asking awkward questions at any level of the organisation.
  

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

 

The first thing is to be absolutely clear on what the client is looking for. You can't provide any value if you don't deliver anything you were hired to provide or there is confusion about what is to be delivered.

As part of the work on CASS engagements, there is the opportunity to give both a level of assurance on CASS controls and the environment, policies, procedures etc at a senior level and to be able to influence resourcing, governance and oversight as it impacts throughout the business. It is also important to provide comfort at a board level that CASS is being actively monitored and managed.

Ensure that everything you do is documented in such a way that at any point you can hand over the work to an auditor or regulator to show what you have done, the decisions you have made and why and the work undertaken to set out the position or to make changes.

Discuss all items with the embedded team to understand their responsibilities and views, their knowledge and unique skills. Then use this to build on and shape the CASS oversight into something that works for the firm, on both a commercial and regulatory level.

From my own perspective, I have had many years experience providing compliance oversight of operations teams, so have an in-depth technical knowledge of how processes fit together and how CASS is interwoven into each area. I have designed, approved, steered, bartered and rolled my sleeves up to ensure firms implement the correct control framework and processes. This experience, used in the right way for the client, will yield enormous value to their agenda.
 

4. When should a client move away from relying on contractors for embedding CASS oversight?

 

Interim support or expertise can be extremely valuable, however if you are embarking on a longer term strategic project then it's good for your business to have embedded permanent resource who will be able to grow and learn with the business. You also need to feel that you are getting value from the support.

When using interim support to embed CASS oversight, it is important to ensure there is good cross coverage of activities so that the whole programme is not concentrated in the hands of someone who can leave at a moments notice. There is no perfect answer to this question, it entirely depends on circumstance, the nature of the engagement and many other factors.

 

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

The main advantage is in hiring a recognised expert in the field as opposed to an experienced firm with perhaps not so experienced individuals performing the work with a centralised expertise and reporting structure. You are hiring someone who can help your firm and help your agenda, using their expertise but at your request and direction. This is in contrast to a fact finding period of work that raises many issues, few or unworkable solutions and working to a different agenda.

Cost - it goes without saying that an independent contractor will almost always be the cheaper option, but the industry as a whole is still sold on the belief that the rubber stamp from a major consultancy is a necessary evil. This may be absolutely true for your firm, however I can only recommend speaking to a serious technically sound, passionate independent consultant, and then make up your mind on whether or not you think they can do the job you require. You may even find that they have experience in other areas that are causing you pain such as transaction reporting, MAD etc and are willing to help because they are working for you. 
 

If you want to have a chat with us or Kenneth about how we can help your organisation plan CASS requirements then please get in touch.

Tel: 0161 457 1145 

Email: enquiries@thefourthline.co.uk

 

 

 

 

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