Financial Services

Feeling good about forward fixes...

Alex Ellerton Alex Ellerton

Executing the scope of remediation

Initiating a remediation programme often involves stemming the re-occurrence of a business issue but there are different approaches to this and it is imperative that there is absolute clarity as early as possible as to whether the issue is still occurring. Many organisations initially focus on ‘stopping the rot’ however how do firms understand what is needed to do this successfully?

One of the key characteristics of a successful remediation programme is often the implementation of enhancements to the control environment to prevent the same issue re-occurring. The result of this process is known as a ‘forward fix’ and is particularly important when an organisation needs to continue offering the products and services while the remediation is taking place. 

A forward fix can be either tactical or strategic in nature and often involves activities such as process re-engineering, the recruitment of additional resources, training and education of existing personnel; and the enhancement of existing business systems. An Accountable Executive should own the forward fix and should have sufficient budget to implement it effectively and on a timely basis.

Firms should ensure that when a forward fix is required, it is fully implemented and tested before closing out a remediation project. Getting a forward fix wrong could have significant legal, regulatory or reputational consequences for an organisation, particularly if it results in further customer detriment.

Some organisations rely purely on management representations or attestations to confirm that a forward fix has been implemented. Due to the potentially significant impact of getting it wrong, we recommend that firms also consider independent assurance testing by appropriately skilled individuals who can advise on both the design and operating effectiveness of the control enhancements. Only after receiving this assurance should the Accountable Executive feel comfortable that an effective forward fix is in place and support the closure of the remediation project.

In summary, the key considerations when implementing an effective forward fix are as follows:

  • Does the fix have a clearly defined Accountable Executive? 
  • Are there appropriate resources and financial commitment to implement an effective forward fix on a timely basis (especially where a strategic fix is required)?
  • Is the implementation of the fix subject to an appropriate level of internal governance?
  • Is the design and operating effectiveness of the forward fix subject to independent assurance prior to the closure of a remediation project? Will appropriately skilled personnel conduct the testing?
  • Is independent testing of a forward fix a mandatory part of the closure process for a remediation project?
  • What plan is in place to monitor the continued effectiveness of the forward fix?

For further information go to Past business reviews: making a success out of redress or contact Alex Ellerton.