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UK Investment Management – Hot Topics 2023

Internal Audit Areas of Focus

August 2023

We are pleased to publish our annual viewpoint on hot topics firms should be considering for their 2023-24 internal audit plans.

Our annual ‘Aide Memoire’ document has been put together by our team of internal audit professionals and subject matter experts, who work very closely with the internal audit functions of investment managers of varying scale in the sector as well as the FCA. The document has been informed through the FCA Business Plan for this year and industry trends/concerns identified through continuing engagement with a range of clients in the sector. We hope this paper offers useful insights and supports your risk assessment and planning process for internal audit for 2023-24.

Some of the key themes are:

  • Consumer focus is on top of the regulator’s agenda, with implementation of Consumer Duty becoming the most talked about topic this year. In addition to Consumer Duty implementation, firms are being urged to revisit processes associated with Product Governance and Suitability and Vulnerable Customers in the context of the Duty.
  • With the continued focus from investors on sustainable investment products, the FCA has continued its scrutiny on ESG and climate risks as part of its strategy for positive change.
  • The FCA is gearing up its efforts in identifying frauds through data-led approaches, and the regulator expects firms to prioritize controls to reduce financial crime.
  • Cyber security continues to remain a key concern area for the FCA, with threats increasing and diversifying as a result of changes in social norms, working habits, and lack of “cyber-safe” technology environments which are more vulnerable to attacks.
  • Some of the other focus areas include Operational Resilience, Fund Liquidity and ICARA.

The publication also touches upon standing topics of continuing importance within the investment management industry from both regulatory and governance good practice perspective as well as emerging topics. Please reach out to contacts listed below if you would like to discuss any of the topics.

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