About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Costs of Living Wills Requirements Likely to be Considerable But Are Hard to Estimate, Says Kinetic Partners’ Shrimpton

Subscribe to our newsletter

The UK Financial Services Authority (FSA) has just released a new consultation paper on its proposals for recovery and resolution planning requirements, which estimates that the direct costs of implementation will be between £4 million and £35 million for “high impact” firms and the ongoing compliance costs to the industry will be between £150 million and £400 million. Andrew Shrimpton, member at financial advisory firm Kinetic Partners, explains to Reference Data Review that the true costs of the changes are likely to be considerable, but are hard to determine fully at this point in time.

“Firms will be faced with a considerable expense in preparing the plans and structures necessary to meet the FSA’s requirements, however, it is difficult to estimate at this stage exactly what the costs will be,” says Shrimpton.

On this note, he indicates that the resolution plan requirements are much harder to quantify than recovery plan requirements. “Recovery plans can be implemented fairly quickly, and become part of management’s ongoing contingency planning, without extensive additional cost to the firm. The resolution plan requirements, however, are completely new, and experience of other new regulations previously implemented suggests that the costs stated could be underestimates,” he explains.

Firms won’t have long to find out the initial implementation costs, given that the FSA is planning to publish the final rules in the first quarter of next year. At that point certain provisions will come into effect that will mean firms will be required to submit the first draft of their recovery and resolution plans in June 2012. Firms will therefore have six months to get the necessary data infrastructure in place to be able to pull together the required data on demand.

“Firms will have to go through many iterations and likely seek expensive external advice to ensure they have met all the requirements,” adds Shrimpton.

Back in November 2009, Fed board governor Daniel Tarullo indicated that in order to meet living wills requirements firms will need sufficiently robust data management systems in place to track data quality and provide audit trails for regulators. He therefore noted that a “very significant upgrade of management information systems (MIS) may be the only way for the firm to satisfy living will requirements”.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: How to organise, integrate and structure data for successful AI

25 September 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes Artificial intelligence (AI) is increasingly being rolled out across financial institutions, being put to work in applications that are transforming everything from back-office data management to front-office trading platforms. The potential for AI to bring further cost-savings and operational gains are...

BLOG

Generali-Natixis Tie-up Highlights Data and Operational Complexities of Asset Management M&A

By Jeremy Katzeff, head of buy-side solutions at GoldenSource. After much speculation, it’s now confirmed. The asset management industry welcomes another mega fund to its ranks after the tie-up between the asset management businesses of Natixis and Generali Group. The reasons behind the merger are the same as they have been for the last few...

EVENT

AI in Capital Markets Summit New York

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...