We can expect a step change in the approach that the FSA are adopting with a more direct and intrusive approach to supervision from now on.
Less emphasis on systems and controls and a shift towards "judgement of senior managment" - this represents a move towards outputs and outcomes.
More resource will be committed to "mystery shopping" and "branch visits" than detailed reviews of high-level management information.
The FSA intends to hire an extra 280 specialist and supervisory staff, a 30% increase in its supervisory capacity, and has introduced a new Training & Competence scheme for their staff. The FSA are recruiting seasoned industry proffessionals who understand the marketplace and are experienced practitioners.
This “supervisory revolution” will mean that Firms need to expect a much more hands on and intrusive style of supervision from the FSA. As with boy scouts, Firms need to "be prepared" and be able to demonstrate the quality of their decision making and risk management.
