Going through many years of education, I had never come across the word ‘compliance’ when hearing about potential career prospects. As many of us do, I defaulted to studying Law as it was something I recognised and had previously been exposed to as a career that would enhance my already proficient skills in English Language & Literature, History, Sociology and Performance Studies (my wild card).
With every necessary yet unexpected turn in my career, I’ve learnt that there is always more to learn and it is essential to remain exposed to more knowledge and to ground myself in the understanding of it.
With that said, the world of Compliance in Financial Services can feel like a formidable mountain at times and so I have collated a number of “buzzwords” which relate to current regulatory reforms, that you will likely hear when speaking with a Compliance Professional in the bid to break them down into layman’s terms.
Operational Resilience
This is the ability of firms and the financial sector as a whole to prevent, adapt, respond, recover and learn from operational disruption. This is implemented through risk identification and assessment, risk mitigation and ongoing monitoring which together, minimises disruptions and their effects.
ESG: Environmental, Social & Governances
ESG is a non-financial evaluation of a firm’s collective conscientiousness for social and environmental factors. This is broken down into three strands:
Environmental: Measures of how a company rates in its protection of the environment.
Waste and pollution, resource depletion, greenhouse gas emissions, deforestation and climate change
Social: Measures a company’s relationships with its employees, customers, other businesses, and the community around it.
Employee relations and diversity, working conditions, local communities, health, safety and conflict.
Governance: Measures a firm’s leadership; how executives are compensated relative to the company’s sustainability goals, and the internal controls protecting the integrity of the firm’s business information.
Tax strategy, executive remuneration, donations and political lobbying, corruption, bribery, board diversity and structure.
Consumer Duty
This is a refined requirement that the FCA has placed on firms to create a significant shift in their cultures and behaviours, encouraging consistent focus on consumer outcomes, and putting customers in a position where they can act and make decisions in their interests. The outcomes of this duty are:
Fair treatment of all consumers
Products designed to meet needs
Clear information
Suitable advice
Products that perform to expectations
No unreasonable post sale barriers
BNPL: Buy Now, Pay Later
BNPL firms sell a type of instalment loan. This loan divides your purchase into multiple equal payments, with the first being due at checkout. The remaining payments are billed to your debit or credit card until your purchase is paid in full.
Embedded Finance
Embedded finance refers to the seamless integration of financial services adopted by non-financial companies. An example of this is how retailers such as ASOS or Schuh can now embed financial lending services onto their platform and give their customers the option to split online purchases into monthly instalments, also known as Buy Now, Pay Later.
Horizon Scanning
Horizon scanning is the way in which a firm looks to the future to ascertain what challenges it may face. In terms of compliance, this means looking ahead to anticipate the regulatory changes that might come into play, so that a firm is ready to implement such changes from the first day that they come into force.
Open Banking
This is a financial services term within the FinTech industry that refers to the use of open APIs that enable third-party developers to build applications and services around a financial institution. Open banking provides financial transparency options for account holders ranging from open data to private data.
UI, UX, CX: User Interface, User Experience, Customer Experience
Within FinTech, there is a plethora of abbreviations to learn and adjust to with some of the most interesting being those mentioned above as they are all complementary of each other.
UI stands for User Interface. It is the visual design with which a user interacts with a brand within a particular part of their journey, for example, the sign in page of an app is a user interface.
UX stands for User Experience. This is the overall experience a user has with a brand during a journey across a single channel (this is an important distinction). A user experience will probably involve multiple UIs which are used at different stages of that journey.
CX stands for Customer Experience. This should be considered as the sum of all touch points a brand has with its customers, across any channel and at any time. FinTech firms tend to have CX teams (their customer support function) that provides guidance and help in relation to the overall UX that a customer has had with a number of UIs… Get it?
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Liz. #FTWL
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