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May 1, 2019updated 30 Jun 2022 9:14am

Wanted: A Technology Partner for the FSCS

Cloud, cybersecurity, low code application development: the scope is broad...

By CBR Staff Writer

The Financial Services Compensation Scheme (FSCS) may be fresh from signing Capita to a new £37 million contract to handle all inbound and outbound financial claims for the next five years, but the organisation is not done: it’s now tapping the market for a strategic technology partner too, announcing a pre-market engagement exercise today.

The move comes amid a shakeup at the statutory UK compensation scheme provider, whose CEO, Mark Neale, steps down later this week after nearly a decade in charge.

The new strategic technology partner will be responsible for  working with the FSCS to deliver the CIO’s strategy and support delivery of the FSCS’s 2020 strategy, a new Public Information Notice (PIN) posted this week to European procurement portal TED reveals, detailing a sweeping role spanning cloud, security and broader digitisation.

FSCS Technology Partner: What’s Needed

Saying a full contract notice will be published in late July, the FSCS PIN suggests the role is likely to be a substantial one, as it continues efforts to modernise its processes.

“The technology partner will work with FSCS to meet our key technology challenges that will be important to deliver our strategy for the 2020s” it said. These will include broad enterprise digitisation, low code/no code-based platforms for application delivery, support maturing its Dev/Ops models, better use of workplace technology “to improve our culture and performance”, adoption of/migration to cloud, cybersecurity and more.

The FSCS’s 2020 strategy suggests improved customer experience is a priority: “Where consumers make claims to us, we must provide a service that is fast, accurate, easy to use… such a service will also be cheaper and offer better value to levy payers.”

How the FSCS Works

FSCS protection is triggered when a regulated firm is unable to meet its customers’ claims. The FSCS covers deposits; insurance; investments; investment and pension advice; home finance advice and debt management. Its service is free for end-users.

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The FSCS is operationally independent but accountable to the Bank of England and the Financial Conduct Authority and operates within the rules set by the regulators. It is funded by the industry through levies and has faced criticism that making claims for FSCS protection is a cumbersome and confusing process for applicants.

As outgoing CEO Mark Neale puts it: “FSCS does not aspire to be at the cutting edge of technology, but we do need to keep pace if our service is to meet expectations.”

Neither the FSCS nor CIO Paul Brocklehurst had responded to requests for comment as we published. We will update the story when we receive further comment.

The FSCS has recovered £20 billion from the 2008 bank failures but its workload continues to grow. As Mr Neale (a former Director General for Security at the Home Office with responsibility for Counterterrorism and Organised Crime) put it in a pointed farewell speech: “The truly sobering thing is that a substantial proportion – over 60 percent – of compensation costs are a result of mis-selling or bad advice.”

He added: “FSCS has paid out £2 billion in compensation because consumers have been advised or encouraged to buy wholly inappropriate products – everything from PPI insurance, to death bonds, to illiquid overseas property funds.”

One of the new technology partner’s roles: making getting that money back easier.

See also: Office for National Statistics Wants to Turn a Big Data Eye on Company Ownership, Balance Sheets

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