The finance team plays a critical role in managing financial stability, regulatory compliance, and operational efficiency. Here are the five most important things they typically have to deal with:
Regulatory Compliance
Financial Services organisations are heavily regulated, primarily by two authorities depending on who they are - the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The finance team must ensure compliance with rules governing capital adequacy, liquidity, and risk management (such as Basel III requirements). They handle reporting to regulators, making sure all financial practices meet legal standards, and managing compliance with anti-money laundering (AML) and know-your-customer (KYC) laws.
Financial Reporting and Auditing
Accurate and timely financial reporting is vital for transparency with members (building societies are member-owned) and customers, regulators, and stakeholders. The finance team prepares statutory accounts, manages external audits, and reports financial performance. They also provide key insights to senior management through internal reports, helping with strategic decisions. This includes reporting on profitability, asset performance, and operational efficiency.
Risk Management
Lenders face various financial risks, such as credit risk (e.g. from mortgage defaults), interest rate risk, liquidity risk, and operational risk. The finance team works closely with risk management to mitigate these, ensuring that there are adequate capital buffers and appropriate risk models in place. Stress testing and scenario planning are part of this function to prepare for economic downturns.
Treasury and Liquidity Management
The finance team ensures there is sufficient liquidity to meet all obligations and withdrawals. Managing the company’s cash flow, investment of surplus funds, and access to wholesale funding markets is crucial. The team oversees the balance between savings products and mortgage lending, ensuring healthy liquidity ratios while maintaining profitability.
Budgeting, Forecasting, and Strategic Planning
Financial planning plays a key role in the long-term sustainability of a company. The finance team develops budgets, forecasts, and financial models to project income, costs, and profits. They assess market conditions, demand, interest rate trends, and competitive pressures to support strategic objectives, such as expanding mortgage portfolios or improving customer services.
In summary, small and medium sized financial services finance teams juggle regulatory obligations, risk management, treasury functions, financial reporting, and long-term planning, all while ensuring they maintain trust with their members and customers.
We recruit across all levels of roles from CFO downwards within the finance teams of our clients, covering the Financial Control functions, Financial Planning & Analysis, Treasury Management and Regulatory Reporting.
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