How quickly a snowflake can become an avalanche

Although my rugged athleticism may not be immediately evident from the small head and shoulders photo that accompanies this blog each week, I am a keen skier .

Whilst in the Alps just after Christmas, I was dismayed to find that one of my favourite slopes had been closed due to what seemed to me to be a fairly light flurry of snow. I mentioned my frustration to one of the locals and he explained that, although today’s weather was light when viewed in isolation, one also needed to consider the snowfall of the past few days and extraneous factors such as the high winds. He then ended with, “Combien de temps un flocon de neige devient une avalanche.” It may not sound as profound when delivered in my own Lancastrian tones, but the overall message was that one must not forget how quickly a snowflake can become an avalanche.  

This phrase came back to me this week when I was reviewing some Financial Conduct Authority (FCA) consumer credit activity. As you know, the regulator recently issued a ‘call for input’ on much of the policy it currently has in place. 
Additionally, there’s an awful lot of activity going on around readying firms for the introduction of the Mortgage Credit Directive. Simultaneously, the FCA has also released guidance on guarantor loans and default notices – guidance which corrected a different piece of guidance it had issued a few months previously. And this isn’t even a busy period! 

Sorry to break it to you, but this is what life is like under the FCA. It is constantly evaluating how aspects of policy are working for consumers and the market and adjusting accordingly. This might come in the form of a tweak to documentation – nothing more than a few flakes – but fairly hot on its heels might well be a snowstorm in the shape of major regulatory upheaval. Having worked in the similarly regulated financial services sector for over 20 years, I can tell you that every week brings at least one regulatory change; it may be something minor or esoteric that affects very few firms, but there are also regular alterations to the regime which have a major impact on the market as a whole.  
One at a time these changes may seem perfectly manageable. However, you need to bear in mind the weight of yesterday’s ‘snowfall’ – and the one headed your way tomorrow. Add in extraneous factors like resource, a period of staff absence or training, a rise in the number of customers with whom you’re working etc, and it’s easy to see how a few regulatory snowflakes can easily become an out of control avalanche.  

The SimplyBiz Group has 14 years of experience in providing ongoing compliance support – and that’s just one of the reasons why the AOBP has chosen to partner with us. If you want help with applying for permissions or changing your application date for consumer credit authorisation, please get in touch with us urgently on 01484 443 424.

Attributed to David Golder, Managing Director, Consumer Credit Centre, SimplyBiz Group