In a recent speech, Director of Innovation at the FCA, Nick Cook, explored the role technology has played in dramatically changing the insurance market. The speech considered how the regulator aims to embrace new technologies and actively inspire innovation where doing so will deliver value to the wider public.
In recent Insight articles, we have talked a lot about the concept of organisational culture as this has been a focus of the FCA for some time, particularly with the Senior Managers and Certification Regime (SM&CR) on the horizon and the opportunity this presents to create ‘healthy cultures’ in financial services.
The FCA is not being overly prescriptive about what exactly defines a healthy culture. Every firm is different, with culture being formed, among other things, from the firm’s values, attitudes to diversity and inclusion, learning and development.
Innovation also forms part of a firm’s culture. Being able to innovate is essential to the success of any organisation – if a business is not forward-thinking it is less likely to adapt to changes in the market, mitigate risks and develop in keeping with the needs of its customers.
‘Innovation, data and data ethics’ is cited as a cross-sector strategic challenge in the FCA’s business plan for 2019/20. It is an area which spans financial services as a whole and is one that the regulator wants to ‘anticipate and influence’ the market development of. The FCA seeks to ensure that, where technology and data use is rapidly advancing, that such advancement works in the interests of consumers and does not cause harm – through misuse of personal data, for example.
The figures cited in Nick Cook’s speech paint the picture of a fast-moving landscape, emphasising the need for a business to be prepared to adapt to the needs of consumers. Data is continually being created and its volume continues to expand at an incredible rate – currently around 300 billion emails are sent each day, along with billions of social media posts and internet searches. The ways in which the industry operates, and client interactions occur is continually developing.
How firms deal with the implications of increased use of innovative technologies will form an important part of its culture, helping the firm compete in the market but also ensuring that the customer does not experience detriment.
A recent Insight article focused on the way in which the mindset of customers is more forward-thinking. As technology develops, so firms should innovate with it, arguably from a business and culture perspective. If a willingness to embrace technology and new solutions in ways that are ethical and beneficial to the customer is part of an organisation’s day-to-day thinking, then they are more likely to thrive in a rapidly changing market.
Organisational culture is not easy to define. It is a concept that is not black and white and, as all firms are different, there can be no ‘one size fits all’ approach. How, for instance, would you define the culture of your own organisation and why? What are the characteristics of a ‘healthy’ culture – and conversely an ‘unhealthy’ one? What role does innovation play in your organisational culture?