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22 October 2018 1 min read

Reducing the burden: 2018 annual CASS survey

Executive Summary

‘Reducing the burden’


Baringa Partners’ 2018 Annual CASS Survey was completed by more than 75 respondents. The survey explored some key themes, including: trends in the industry from 2017, the role of IT and automation, and key areas of concern.

Following 2017’s ‘a new normal’, there is no doubt we are now entering a period of consolidation for CASS. There are no significant regulatory changes in the pipeline and while we are unlikely to see any ‘roll back’ in Audit standards it does not look like there will be any additional burden either.

Despite this, firms must keep their ‘eye on the ball’. The recent failure of Beaufort Securities had a significant and public impact on investor confidence in the CASS rules, and the level of protection they afford. This highlighted just how quickly the hard work of CASS firms can be undone in the eyes of investors.

Firms continue to experience increased fatigue regarding the level of administrative burden CASS compliance brings, but a period of consolidation should not mean just standing still. Many firms are instead looking to use some of the breathing space afforded them by the seeming slowdown in regulatory change to optimise their processes, automate controls, and reduce both operational risk and costs. An increase in technology spend implies this shift is already underway for many of the firms surveyed.

There is also now a chance for firms to ‘clean up around the edges’, mandates (CASS 8) is an area we see as being flagged for further scrutiny as auditors look for new areas to make recommendations now that CASS toolkits are operational.

Looking forward, there will also be opportunities for firms to capitalise on industry shifts:

  • The extension of unbreakable term deposits to 95 days has seen a number of firms looking to maximise their returns on client money balances

  • Opportunities for improvement and efficiencies exist post-MiFID II as firms migrate from tactical tools and workarounds, into more strategic, long-term technology solutions

  • The UK’s withdrawal from the EU will see many firms re-visit their legal entity structures, which may also identify opportunities for rationalisation and savings

Taking all of these points into consideration, it is clear that we are not ‘done with CASS’ just yet. CASS continues to evolve and present new and interesting challenges and opportunities, and is likely to do so for some time to come…

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