Keeping IT up to date

You will not be surprised to learn that the Financial Services Authority interprets many rules with a wide rather than narrow definition. Your firm will, like others, have carefully scrutinised your treating customers fairly arrangements but you need to think about the wider issues. Believe it or not, the level of your firm's information technology capability comes into that.

You mention having a bespoke broking program from one of the leading software providers; having that looks after client data and information storage and will also take care of insurer premium settlements.

Yet step outside these basic requirements for a moment to think about other areas of the business or day-to-day practice in which IT becomes relevant and consider how you measure up to the requirements of modern-day business.

The FSA is starting to look at firms' IT capabilities and has produced a factsheet that outlines good and bad practice. For further information go to fsa.gov.uk/ smallfirms/resources/factsheets/pdfs/data_security.pdf.

The factsheet covers areas such as what versions of your software you use, what security is in force, passwords, firewalls and virus protection. I would expect most good compliance firms to strengthen their health-check questions in this vital area.

This is not just about ensuring that everything in your office is secure but also about equipping yourself with current technology.

IT is a fast-moving area with what seems like new products every day. Witness promotions for the new PC operating system Microsoft Windows 7 - many were considering upgrading to Vista only last week. Next year will see Microsoft Office 2010 released and no longer are we tied to Microsoft's Internet Explorer internet browser: many are switching to Firefox, Safari or Google Chrome.

Microsoft Office 2003 is still widely used in many broking offices but, as time passes, firms will use more recent versions and this can lead to difficulty in downloading and viewing documents for those on older versions.

This issue is also part of your risk management, compliance and business continuity planning. By ensuring that your software is as current as possible, you will be able to work with any documents available from your suppliers, third parties and clients.

Imagine a scenario in which a client sends you instructions in a document that you cannot open because you do not have a current version of the relevant software. You fail to take action to find out what was in the document and in the meantime a claim arises involving the item for which they had requested cover.

You would have a disgruntled client, a less-than-happy professional indemnity insurer and possibly a regulator wondering whether yours was a suitable firm to remain authorised. This is an extreme example but I hope it makes the point.

The more recent your technology is, the more secure it is likely to be. The FSA expects risk management and business planning to form part of the compliance process and up-to-date IT is certainly part of this requirement.

You might be thinking 'yet more expense'. The good news is that many updates are available free from Microsoft. I would like to think that whoever is responsible for IT in your office is keeping you well informed with what is available to download for free.

Like me, I suspect that you come from a generation that has seen technology progress from the humble photocopier to netbooks, podcasts and social media websites. The march of technological progress will not abate so you do need to have a policy that keeps your firm in touch with the cutting edge of technology. Speak with your IT specialist and carry out a review with your compliance consultant.