Six Degrees Group educates public sector in cloud ... » LONDON, U.K: Six Degrees Group (6DG) has announced that it is continuing to educate the public secto... Security Industry Authority renews NSI's mandate t... » The Security Industry Authority (SIA) has renewed the National Security Inspectorate’s (NSI) mandate... Goodluck Jonathan: The limits of goodluck » A quintessential fibre of a discerning leader or anybody who aspires to a leadership position is mas... Dimension data launches strategy to help organis... » The rising cost of energy, real estate, and office space, coupled with growing pressure to implement... New learning materials for updated security qual... » A new range of learning resources has been launched by Highfield.co.uk to help educators and learner... UK: Service of commemoration scheduled for Marc... » The Prime Minister David Cameron announced yesterday in the House of Commons that a Service of Comme... Clavister launches entry-level W20 Firewall » Clavister has announced the launch of its new Clavister W20 firewall appliance. The new product is t... Tinubu Risk Management Center to go live in Janu... » Tinubu Square, the trusted source of credit risk solutions for trade credit insurers and businesses,... BAE Systems awarded £50 million contract » Photo: MoD Photo: MoD The Ministry of Defence (MOD) has awarded a £50m contract to BAE Systems t... Octavian opens new office in South Africa » Octavian Security has kicked off its ambitious 2015 growth plans by launching a new South African of...

CLICK HERE TO

Advertise with Vigilance

Got News?

Got news for Vigilance?

Have you got news/articles for us? We welcome news stories and articles from security experts, intelligence analysts, industry players, security correspondents in the main stream media and our numerous readers across the globe.

READ MORE

Subscribe to Vigilance Weekly

Information Security Header

The FSA’s proposals for client money regulation will force organisations to introduce automated, streamlined controls that maintain the integrity of accounts

LONDON: AutoRek, the financial data management expert, has issued a strong warning to financial institutions that it will be imperative to rethink current processes in light of the recent proposals outlining client money changes. Now that the FSA has closed its consultation period on Client Assets (CASS), asset managers, banks and insurance providers need to examine how they will reconcile their accounts.

 

The creation of sub-pools and more frequent CASS calculations will require firms to frequently align balances with details that are stored in administration systems so that positions can be calculated on a daily basis. Many firms will therefore be forced to examine their current processes and adopt new systems to improve financial data management. To achieve better controls, businesses will need to develop deployment methodologies that identify how they can move away from time-consuming, manual processes towards automated systems that enable the firm to complete more frequent reconciliations and meet client money regulations.

Jim Muir director of AutoRek comments on the challenges that the client money changes pose to financial organisations: “The FSA has vastly increased the size of its client money inspection teams in the last year and in today’s regulated markets anything that belongs to a retail client is subject to controls designed to reduce the risk exposure surrounding investments. However, in financial services where businesses are managing a high volume of operations and relying on a variety of different legacy systems, reconciling accounts can be a very cumbersome process, resulting in delays to the level of protection being provided and an over-reliance on those people that have historical knowledge of the business and can effectively operate the controls.”

Jim Muir continues to explain the importance of rethinking these processes: “There’s more to the client money rules than simply calculating the position clients are in. The operational processes need to be redesigned to capture adequate data, for example, clear client documentation regarding set-offs and the legal status of each bank account. There is also a real opportunity to put clients on a different commercial footing so that the firm’s funding requirements can be reduced, helping to free up valuable capital for other investments.”