- AML/CFT supervisor action: If you are an AML/CFT reporting entity, then expect increased supervisor action. Ensure your AML/CFT risk assessment and programme are up to date and you have actioned findings from your last audit.
- Increased regulator activity: Each year, regulators such as Financial Markets Authority (FMA), Department of Internal Affairs and Commerce Commission state they will be increasing their regulatory activities. However, 2022 may be the year where this really happens. By way of example, the FMA has significantly increased staff levels, it has a new CEO and there have been numerous speeches and reports from FMA signalling a reduced tolerance for non-compliance. Regulatory risk should be given an increased ‘likelihood’ rating by all financial services businesses and businesses are encouraged to undertake a compliance assurance review sooner rather than later to identify any compliance gaps. It’s better to have a reputable firm such as Strategi identify gaps and provide recommendations for improvement before the regulator decides to pay a visit or you receive a complaint from one of your clients.
- AML/CFT software: If you have a large client base, then now is the time to simplify the client AML/CFT due diligence process through use of appropriate software. Strategi can provide recommendations on suitable providers.
- Education will become more important: This will be in the form of the Level 5 qualification and continuing professional development (CPD). Allocate time and money and get it out of the way sooner rather than later in the year.
- Governance will be critical: Financial advice providers, FMA licence holders and finance companies all have specific governance requirements. Invest now in high quality defendable governance education for your directors. This should ideally provide a recognisable qualification.
- There will be further COVID related impediments: Omicron or some other variant will likely require businesses to have some or all staff working from home for some of the year. This will require those companies which are still paper based to move to digital storage and invest into laptops and video communication between staff and with clients. We are regularly surprised to discover businesses where staff are not provided with modern laptops which they take home each night so they can continue to operate during the various traffic light levels. Businesses will also need to undertake more transactions using digital applications and the provision of remote advice.
- Cyber-security will continue to be a major threat: Cyber-security should be one of the top threats on every company’s risk register. Product providers and clients will want to know how financial intermediaries are protecting client data. All staff should undertake annual cyber-security training, businesses should invest in an IT security review and IT software and hardware will need to be kept up to date.
- Consolidation will increase: We will see an increased number of business consolidations – especially with financial advice providers. There will always be a space for the sole operator but increasingly, firms will want to provide a more holistic service to clients, and this will necessitate businesses with multiple advisers with different Level 5 specialist strands enabling the provision of investment, personal risk, general insurance and lending advice. Older advisers may start to implement their retirement plan and sell their books or merge their business with younger advisers who are keen to grow.
- Staff scarcity: There is a national shortage of skilled financial services staff. Companies will need to invest into recruiting, training and maintaining the right staff. This takes time and money. Ideally staff need to have a career plan which includes the Level 5 qualification, ongoing CPD and where appropriate, specialist compliance and governance training.
- Remain relevant for clients: Client needs and expectations change over time. It’s essential for businesses to survey clients to identify if their business model and service proposition needs to change. Never assume that you can continue to provide the same service at the same price year after year.
Menu
GET IN TOUCH
Email
Phone
Physical address
Unit E, Corinthian Office Park
17 Corinthian Drive, Albany 0632
Auckland, New Zealand