The CEO designate of the Financial Conduct Authority told delegates that while the mutual model is “strong” and delivers “significant value to its members” it is still facing the pressure from competition from the banks and other parts of the industry to grow business.
Wheatley warned mutuals to make sure that their management and the board have capacity and the capability to understand the new product area.
It’s about making effective initial and ongoing due diligence of assessment of product and processes, he said.
“We have seen many examples, which in certain circumstances might be the right product, but are sold through a channel or in a way which renders the process unsuitable,” said Wheatley.
Michael Coogan, strategic adviser at Deloitte? challenged Wheatley’s stance on managing risk while moving into new areas of business, arguing that this would impact firms willingness to innovate.
Wheatley said: “This trade off between protection and innovation is a real one. I think there will be greater scrutiny given to new products and if that means some innovation slowdown, then so be it.
“If the risk approach slows down complexity of products coming through to the market, that’s a good thing. But of course we don’t want to stop new products that will deliver benefits to the market.
