Insight from a CASS Expert: Peter Carnell-Xu??

Welcome to the JCR Journal! ??

In our first edition, we ask CASS SME Peter Carnell-Xu about all things CASS.

Peter has spent over 10 years working in CASS at some of the UK's biggest Investment Platforms. Starting off in Finance, Peters most recent role was leading a team of CASS professionals managing the CASS function, including CASS Operations, CASS Oversight and CASS Technical.

How did you originally get into CASS?

I've always been interested in numbers and that turned into aspirations for a career in Finance/Financial Services. Starting out as an administrator in the platform business doing a bit of everything (finance, operations, regulatory compliance), I qualified as an accountant and subsequently chose to specialise in CASS.

What do you enjoy most about working in CASS?

Having a set of rules and guidance on which to build controls and frame an informed opinion very much appeals to me. Some of the CASS rules are very clear, giving a straightforward and easy solution, whilst others are open to interpretation allowing for critical thinking, pragmatism and a thoughtful application of expertise. The broad reach of the latter and the impact on all parts of the business provides a tangible sense of the importance of CASS.

How have CASS audits changed over the last few years?

I think most people who have been working in this space for a few years will be familiar with the change in audit standard and increasing focus on the control environment. The change in approach put forward by the FRC has had a real world impact in practical terms and it has been encouraging to watch this unfold. Audits now are far more control focused, with the CASS control framework providing all stakeholders with a much clearer picture of where CASS impacts the organisation. This also ties back to having a set of rules and guidance from which to structure the approach to compliance with CASS. When executed properly, the framework provides a reasonably simple view that links the fundamental rules to their application within the business, the operational processes that touch on these, the controls, the risks, and the supporting evidence that demonstrates adequate compliance.

Audits have also become more frequent as different parties show an increasing interest in CASS. With a solid CASS controls framework, businesses can manage the review, testing and assurance of local controls, Risk and Compliance monitoring can tap into the same information to gain their own assurances, and likewise for Internal Audit, the FCA, and outsourcing arrangements.

I would summarise the change in CASS audits as an increased focus and frequency but with improved tools to make the approach consistent and more efficient.

How would you compare automated to manual processes?

Manual processes always seem to be easier to identify and articulate. When speaking with business areas that have a CASS impact I find there is a need to bridge the gap between what a person does day-to-day and the "CASSifcation" when documenting it. Neither party should be expected to have all the knowledge and working together will bring about the desired outcomes. In this sense, people find it much easier to explain what they do rather than identifying and explaining an automated process.

I think automated processes can be misunderstood or under-appreciated in terms of what they offer. Bringing these to the forefront of people's minds when talking about controls, audits, risk mitigation etc would likely provide an improved picture of the overall control environment that exists but goes unnoticed. By extension, I believe there should be significant interaction between CASS teams and an organisation's IT team, technical architects, and project teams. Technology, and therefore automation, is only going in one direction and the individuals with the technological know-how need to be immersed in CASS as much as the operational areas currently are. This is supported by the increasing presence of the IT CASS audit.

Do you think AI has a part to play in the future of CASS?

We are only now seeing the more practical implementation of AI in a way that the average end user would recognise. The FCA has spoken about using AI for a number of years in terms of firms' databases, rule compliance, CMAR-type data gathering.?I think now it is widely understood that AI can be a whole discipline in its own right and it has taken time to come into its own. I definitely see a future for AI in CASS, or any other rule-based application. Anything prescriptive, like CASS, would benefit from Generative AI; keeping rule mappings up to date, ensuring relevance in policies, procedures and other documentation, supporting the provision of a knowledge bank for staff and I'm sure many more applications and angles that will become apparent over the short to medium term. I admit that I am limited in my knowledge as far as AI goes but I do believe it is the future and will be able to provide meaningful support in financial services as a tool to enhance and augment the experience for people working in this industry.

What is the most difficult part when recruiting in CASS?

CASS is a notoriously small pool of people! ?I see a lot of the same names and faces, and occasionally someone new. CASS is a highly specialist subject - all those in that small pool are still there because they are good at what they do and, presumably, because they enjoy it enough to stick around. The difficulty is finding, training and retaining new people who are engaged, capable and excited enough to be the experts of the future.

I have always thought that my accounting training put me in a strong position to succeed in the world of CASS. When I am recruiting I'm not looking for an accountant by default but I do look for the same skills and ways of thinking. You'd have an officially qualified person looking after your corporate money and I firmly believe you need people with a similar mindset to be looking after your client money. The principles of control, balancing the accounts, understanding where the money flows and how the books and records reflect this all apply.

The importance of CASS (both in real-world application and as consistently communicated by the FCA) and the expertise it requires to succeed should not be underestimated. Recruitment should reflect this in the quality of candidates sourced and businesses should focus on talent growth and retention.

What topic should JCR Talent focus on in our next piece of CASS content?

Personally, I would love to see more on the application of AI in CASS. It's an area I don't know enough about and to hear more from someone with expertise would be invaluable.

A huge thank you to Peter for his insight into the CASS world ??

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