UK Financial Regulator Slammed For Failed Tech Transformation

UK politicians have slammed the nation's financial regulator for failing to implement a transformation program underpinned by technology.

Witnesses asked about the Financial Conduct Authority's transformation program reached "near unanimity" that it was ineffective, according to a report from an All-Party Parliamentary Group (APPG) of MPs.

Bob Blackman, Conservative MP and co-chairman of the APPG, said the FCA's technology-enabled transformation program had not solved the organization's "long list of problems."

"We know that because many of the individuals that provided testimony commented in a very explicit manner in direct response to a question about the transformation program that they did not have confidence that it was making a difference; their collective commentary was highly consistent in that regard," he said.

One participant in the report, an employee speaking anonymously, said two technology projects implemented in Supervision, a data storage project based on SharePoint, and Intact, a case management system, had been implemented "without proper business analysts."

"The new role of the FCA is now being pushed as a 'Data Hub.' This seems strange as it is very alien to its culture and it has a poor cultural history when it comes to technology. For evidence to support this, I would advise asking the organization about the details and cost of the Fujitsu service contract," the employee said.

Earlier this year, Parliament's Treasury Committee found that the FCA maintains six contracts with Fujitsu worth a combined total of just over £9 million ($11.3 million). The Japanese tech services and outsourcing company has said it would not bid for UK public sector work as a result of its role in the Post Office Horizon Scandal, one of the most wide-ranging miscarriages of justice in the UK.

The APPG also heard the FCA had ordered Lenovo tablets, which were designed for light domestic use, and ran them for 14 hours a day in an office environment. "As these were fan-cooled, it meant that after less than three months, all these tablets started to fail as their cooling fans began to grind into the computer circuits around them causing them all to be replaced," the report said [PDF].

The FCA's most recent annual report revealed that it makes £725.1 million ($912 million) income million a year from fees and levies. It spent £17 million ($21 million) on software development costs.

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The FCA annual report said:

The APPG said the transformation program had not worked across all stakeholder groups, and that there was "near unanimity that the FCA's claimed transformation has been ineffective, with cynicism from many respondents about whether it was ever intended to achieve genuine change."

An FCA spokesperson said: "We sympathize with those who have lost out as a result of wrongdoing in financial services. However, we strongly reject the characterization of the organization. We have learned from historic issues and transformed as an organization so we can deliver for consumers, the market and the wider economy." ®