Earlier this year, the FCA published its Business Plan for 2023/2024. Key priorities for the FCA are to protect the wellbeing of consumers, enhance market integrity whilst also promoting healthy competition. The focus for the next year for firms operating in the UK’s financial market will be to reduce and prevent serious harm, set and test high standards and to promote competition and positive change.
The UK financial services market is undergoing considerable and rapid changes. The market is rife with uncertainties including concerns regarding interest rates and inflation. In the business plan, the FCA expressed market expectations of interest rates in the UK to remain volatile. This market volatility has been heightened by geo-political tensions presenting further instability, causing markets to operate on higher alert for any widespread contagion. The FCA also raised concerns that unemployment could increase more than is projected, causing the economy to contract. Finally, the FCA explored the impact of further declines in real household disposable incomes and how higher mortgage rates will put consumers under further pressure. While some of the FCA’s points are clearly consumer based, the impact on the asset management sector is also reflected in the same ecomonic and geopolitical activity and outcomes.
In summary, the undertone of the business plan suggested the need for caution and for firms to show greater consideration for their risk management strategies. A firm’s operational resilience in such a landscape is reliant on robust business continuity planning. As the saying goes: fail to prepare, prepare to fail.
Whilst the FCA’s key focus studied the events of the last year, it is worth noting that since the start of the decade, the focus on robust governance and risk processes coving business continuity has increased for us all. From the global coronavirus pandemic, supply chain disruptions, cyberattacks and climate driven disasters, firms today have experienced the unexpected. Unexpected negative events can often feed from each other, on a global scale. Accenture’s 2021 Global Risk Management Study stated business leaders expect ‘complex risks to business continuity will happen more frequently in the future’.
Managed Service Providers like Alternit One are vulnerable to the same risks as our clients. A1 havedeveloped a business continuity plan whereby we can identify individual threats and any vulnerabilities within our own operational structure, working environment, supply chain and any partner contracts. By establishing these risks, we can mitigate against them, strengthening overall resiliency.
This is one of the reasons we are vendor diverse. Should one of our vendors fall victim to an attack or beimpacted by market conditions, it does not threaten the entirety of our operational capacity to our clients. We believe that vendor diversity is a key component to a business continuity strategy for 2023 and beyond. We see the value of not only working with our clients of their continuity planning, but also looking inwards and securing our own future in order to support our clients.