l Can Small Firms Really Stay Compliant? | SMCR Compliance

Can Small Firms Really Stay Compliant?

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Whether you are the biggest banking conglomerate or the smallest financial business, there is at least one thing you have in common – the legal and moral obligation to adhere to financial regulations.

Well written and conceived regulations are designed to ‘level the playing field’ for competing businesses, as well as protecting them and clients from potential breaches and the punitive and reputational issues associated with these.

However, falling foul of the regulator is arguably an even greater risk for Small to Medium Sized Enterprises (SMEs). Many large businesses can ‘cover’ the cost of a hefty fine (and survive the reputational damage in the long-term), but for a smaller firm it can prove fatal. If the fine itself doesn’t cripple the business, the reputational damage to a ‘challenger brand’ may well strike the fatal blow.

Same issues, different resources

Being under the same regulatory requirements, financial firms of all sizes face very similar challenges in terms of the way they must meet regulatory requirements. However, in the real world we all know there are considerable differences in the compliance resources of an SME firm compared to a Tier One bank for example.

To add further stress to all financial businesses (and SMEs in particular), the Senior Managers and Certification Regime (SMCR) comes into effect on 9th December 2019 and increases personal accountability of senior people in the financial services industry. This will create a ‘perfect storm’ that could be very dangerous for under-prepared firms and the individuals that run them.