On Reflection... 2024

Innovation + Data Management 

AI became more than just a buzzword this year - it’s revolutionising how firms operate, from research to reporting.

Larger firms have embraced bespoke AI models , but many still struggle with manual data management processes which poses substantial risks , highlighting the ongoing need for smarter, cost-effective, and scalable data governance solutions.

Value at the Forefront

With margins tightening, value has been under the microscope. Regulations like Consumer Duty and Assessment of Value have underscored that delivering measurable value is no longer optional - it’s essential.

However, for complex services, assessing whether what’s delivered aligns with requirements and contractual commitments remains a challenge. Key areas under scrutiny include regulatory reporting, benchmark data provision, order management systems, ESG data, and consultancy services.

Looking ahead, I believe smart contracts will be a game-changer, offering firms greater flexibility and enabling swift action when third parties fall short on delivering value.

Business Model Simplification is Key

This year saw firms taking bold steps to simplify their business models.

Functional approach: Audits of roles, responsibilities, processes, and systems have uncovered opportunities to restructure teams and eliminate redundant processes, driving efficiency.

Risk-based approach: With growing regulatory reporting demands, robust data governance has become essential. These solutions ensure compliance while reducing data processing and reporting costs. By integrating product management systems, firms have streamlined third-party services, simplifying oversight and achieving cost savings.

2024 has truly been a year of streamlining for maximum impact.

Governance + Anti Financial Crime (AFC)

Governance has remained a key focus as firms adapted to new regulations and evolving business models. As structures and processes change, aligning management information (MI) and reporting can take time, often leading to overload and duplication. To address this, firms have been reviewing their governance frameworks to ensure clarity on data, processes, systems, people, and risks, resulting in more targeted and timely MI provision. Areas of focus included Consumer Duty, Sustainable Finance and AFC.  

This year, the FCA made it clear that financial crime is a top priority in their 3-year strategy. In response, many investment managers conducted Firm Wide Risk Assessments (FWRA) to meet regulatory expectations, leading to a rise in AFC/AML roles.

These initiatives are paving the way for stronger, more resilient organisations, better equipped to navigate future challenges.

Looking Ahead

As we move into 2025, the focus on Innovation and Data Management, Value, Business Model Simplification and Governance + AFC will intensify. Boards and senior leaders will demand stronger oversight and more robust reporting, paying close attention to key change programmes, tracking progress and expenditure to ensure timely intervention if needed.

We anticipate continued regulatory focus on Consumer Duty and Sustainable Finance, especially after the parliamentary report highlighted concerns about the FCA’s effectiveness. This is likely to lead to strengthened supervisory efforts from the regulator.

Meanwhile, innovation will continue to push boundaries, offering exciting opportunities for transformation.