Podcast S6E8 | Conduct Unbecoming: Emma Parry

TRANSCRIPT

Kimberley Cole 0:01
This is Risky Women Radio, a show that connects, celebrates and champions women in risk regulation and compliance. We’re here to share the insights on the biggest issues in our industry and hear inspiring journeys from our global members. Sign up to our newsletter at riskywomen.org. I’m Kimberley Cole, your Chief Risky Woman.

Kimberley Cole 0:21
Welcome to Risky Women Radio. Today’s risky woman is Emma Parry. So welcome, Emma. Great to have you here.

Emma Parry 0:33
Well, thank you. It’s great to be here.

Kimberley Cole 0:34
So Emma Parry is a C suite and board advisor with broad international investment banking experience. Following a successful career in financial services working for firms such as HSBC, and JP Morgan Chase, she is now building a portfolio career with a specialist focus on conduct risk. Emma has held various roles from COO to program management to leading global client service teams through to conduct and product governance. Her client base includes regtechs, fintechs, wholesale banks and occasionally law firms as an expert witness. So welcome and let’s talk more about your career.

Emma Parry 1:16
Excellent. Thank you so much for the opportunity. It’s great to be here. So yes, my career has been an interesting journey. And I think like so many women that I speak to, there wasn’t really a great plan around it. I studied English at university, and then started my career as a graduate with the Australian Government. Not a lot of people know that! And I was in Canberra, working for the government. And then I transferred to Sydney. And I quickly realized that if I wanted to get onto the housing market in Sydney, I wasn’t going to be able to do that working in a government role, unfortunately. So whilst it was inherently interesting, I very quickly fell in with a crowd who worked in banking. And I decided that that’s what I was going to do. And so I landed a role with Citi Group in Sydney, in the retail bank. And that was going fine until the project I was working on lost its sponsorship. And at that time, I was also thinking about returning to the UK because this is where I was born. So it’s like all roads lead to where I am now. So I quit my job in Sydney and came here worked for Chase Manhattan Bank, then Deloitte Consulting, then JP Morgan Chase, and then laterally HSBC. And then of course, now I’m working on my own as an advisor in my own company focused on conduct risk. So that’s how I’ve got to be here today.

Kimberley Cole 2:42
That’s fantastic. And you’ve sort of given the journey and what were some of the highlights? And why do you think they are important along the way?

Emma Parry 2:49
So I think one of the biggest highlights was at HSBC and working global roles, and building global teams, experiencing different cultures, different business protocols, from the simple things. And Kimberley, you’ll know this from Hong Kong is the business card etiquette, you know, the two handed receipt and giving of business cards are not just putting your straight into your handbag. So those types of etiquette and cultural nuances are tremendously important. I’d say the variety of roles that I’ve had the opportunity to do. And that’s given me a career capital that I’m utilizing now. So I’m very thankful for those opportunities. And I think the transferable skills, a lot of younger women graduates have asked me, you know, what’s most important? And I think one of the key things is, knowing what your transferable skills are, I think, particularly in this job market, where you do need to be adaptable, you need to be agile, and knowing your strengths and what you can do, it makes it so much better.

Kimberley Cole 3:51
Yeah, that’s a very good point, that sort of transferable skills, because I agree with everything changing and moving so quickly, you can’t just sort of rely on exactly what you have today being applicable for the future. So when you think about things that happened during your career, was there, kind of key light bulb moments as we would call them, something that sort of really shaped the choices that you made?

Emma Parry 4:18
I think my light bulb moment came quite early in my career when I realized I needed to continually challenge myself. And that’s a testament to what I’ve done with my career, really, I like to learn, I like new challenges, new opportunities. And I knew I also wanted to travel. And so these were the things that helped determine some of the choices I made along the way and continue to make actually.

Kimberley Cole 4:42
What are some of the biggest risks that you think that you’ve taken a new career?

Emma Parry 4:46
Well, the biggest risk, from most people’s perspective is basically quitting my job in Sydney, and moving myself to London without a job to go to. And I think about it now and I was like, Yeah, I’m just and make it big and financial services. And I had no real plan on how I was going to do that. Apart from I had established a relationship with a headhunter in London. So I had someone to speak with quite quickly when I landed. But yes, I mean, I think that was potentially high risk, but it’s paid off.

Kimberley Cole 5:19
Yeah, I can remember also thinking when I wanted to go to London, and as much as I did that with Reuters, who I was with at the time, my view was, I only need one job. And there’s hundreds of people in London.

Emma Parry 5:33
Exactly, exactly.

Kimberley Cole 5:35
Which now I think I would be more worried than I was back then I just thought it’d be fine.

Emma Parry 5:41
Of course, the market’s bigger here. So one of the things that, you know, living in Sydney and working there, but then when I came to London for a holiday, and you know, you look through the FT and the sorts of jobs that were being advertised, and it’s just a much bigger marketplace and bigger opportunities.

Kimberley Cole 5:58
Yeah, absolutely. So I guess what things are you most passionate about when you sort of think through how your career has taken all these twists and turns?

Emma Parry 6:09
Well at the moment I’m really passionate about investor protection. And I think it comes from my innate desire to see people treated well. And for fairness, that’s where it comes from. And, you know, over the last number of years, and particularly during the pandemic, of course, we saw all sorts of market manipulation schemes, social media scams, and I was absolutely horrified. And so that’s at the moment where my passion lies, but it’s a much deeper desire to see truth and fairness.

Kimberley Cole 6:44
No, that’s very interesting. And so along the way, I like to sort of hear what advice were you given that you really think is both sort of something that you would want to share with others, but then maybe also some of the lessons that you’ve learned, too.

Emma Parry 7:02
So let me start with the lessons. I see it in myself. And my advice, particularly to people starting out, is stay curious, see what’s happening in the industry, stay ahead of the industry trends, what’s happening in the markets. And tools such as LinkedIn, for example, are great ways to stay up to date and to see breaking news as they break, I think continue to evolve your career, I think, sadly, or otherwise, the days of staying with a firm for 20-30 years until retirement are really not with us anymore. So you’ve got to be able to adapt and evolve. And then my third sort of lesson would be to be open to opportunities. I have been very lucky. And wow, when I say lucky, I mean, I’ve had my eyes open to opportunities and seized them as they come along. And that’s worked for me. So that would be one thing I would offer up. And in terms of advice, my father said that there’s no such thing as a bad decision. We make decisions based on the information we have at the time, framed, of course, by our ambitions or our desires. But we know there’s no point in having regrets because what we decide to do then, is based on what we know then.

Kimberley Cole 8:20
Yeah, very true. And the top piece of advice that you were given along the way?

Emma Parry 8:25
It was the fact from my father about there’s no such thing as a bad decision.

Kimberley Cole 8:31
No, that’s true. Okay. Yeah, better to make a decision than not do anything at all!

Emma Parry 8:35
Well, exactly.

Kimberley Cole 8:36
So I sort of see there’s a common theme through here. And I thought what we would dig into today, and what we’re calling this episode is conduct unbecoming. So that seems to be sort of a thread through several of the roles is this whole theme around conduct? So I’d love to sort of dig into that a bit deeper and sort of see how that’s played out through several of the areas that you’ve been involved in. So how do you see that your career evolved into this area of conduct risk?

Emma Parry 9:10
Yes. It’s a great question. Thank you. So in 2015, I was working for HSBC, in a COO role within the business. So frontline. And this was the point at which the FCA became particularly focused on conduct risk. And also there was the MiFID II regulations that were evolving as well. And some of what I’d been doing in my COO role, tended towards looking at regulations and looking also at some of the behaviors and training and some coaching of some of the bankers. And actually I was asked if I wanted to become the Global Head of Product Governance and Conduct Risk, and I jumped at the chance because, you know, I love love a challenge. And so that’s how it came to be and it was a great At experience because I became very close to the regulations, but not from a purist compliance standpoint, but how they played out in the business, in terms of the products in terms of the services being offered and the client base, and bringing that to life within a sort of a governance framework as well, in the business.

Kimberley Cole 10:20
Interesting. And we mentioned at the start, so I’d love to sort of hear a bit more about this, but your experience of being an expert witness, so tell us more like explain that because not everyone’s going to know exactly what an expert witness is, and then tell us more about it.

Emma Parry 10:35
Absolutely. So in some cases, an expert witness is instructed into the case to opine on potentially specific aspects of the case to bring expertise around well, in my case, it was around regulation and certain aspects of the case, which I’ll talk about, to help shed light on the technicality of the case, where the barristers team may not have that sort of expertise. So the case I was involved in related to breaches, alleged breaches, of conduct regulations. And it involved an online trading platform. It involved a retail client, and that client opened an account with the online trading platform to trade in high risk products. So these were Contracts for Difference. For those who are not comfortable or know what a CFD is, it’s a high risk product, because it’s a leveraged product. So for your one pound invested, you get 100 pounds to play with, dare I say it, which means that it magnifies the opportunities to win money, or gain money, but it also amplifies the losses. And CFDs are seen as high risk because of the danger of losing a tremendous amount of money, which is actually what happened in this particular case. And I should point out that CFDs they’re, like a derivative, so you have an underlying asset. And you’re essentially betting to see whether the underlying asset is going to increase or decrease in value.

Kimberley Cole 12:13
And they let retail investors invest?

Emma Parry 12:16
In certain jurisdictions, they don’t. So they’re banned in the US for retail investors. But in other parts of the world, a retail investor is able to invest in them, but they’re protected. So in the UK, which is where this case came to trial, the retail investors are protected under the FCA. The crux of the case was that this retail client opted up to become an elective professional client. And by doing so loses the protections. And the case revolved around the process that that client went through, to opt up from retail to professional. And I’m not really at liberty to give too much away. But suffice to say that the case included evidence of inducements to opt up, which are banned in the UK and in most other jurisdictions. And then the process by which the opt up happened and the the ways in which the process operated, which actually went against the regulations. So that’s where we got to. And the result was that the statutory demand was set aside, which means that the debt, which was significant didn’t need to be paid in the end.

Kimberley Cole 13:32
It’s interesting, though, isn’t it? How you can use your skills, because that’s what I think is most interesting about like that you’ve gone and done this, because people don’t necessarily think about that transferrable skills piece that you mentioned at the start.

Emma Parry 13:46
Exactly. I mean, it was tremendous, from an experience standpoint, not because the retail client lost so much money, but to see the regulations playing out in practice, and what can go wrong. And then the evidence that I was asked to look at, which included emails and voice recordings as well, and comparing that with what the regulations state. So yes, a fascinating experience.

Kimberley Cole 14:12
Yeah. And it’s also I guess, interesting as well, because I think a lot of even processes and procedures and protections that maybe you put in place from a compliance or applying rules and regulations in your own organization, but you don’t necessarily always understand all of the consequences or the unintended consequences.

Emma Parry 14:30
Absolutely correct. Yeah. So you can have the best policy written up or online. But if nobody’s following it, then you’ve got a problem.

Kimberley Cole 14:39
No that’s really, really interesting. And I think once again, very food for thought for people to think about what skills they have all of the other little twists and turns and journeys that you go on from a career perspective. And then you’ve also done a lot of work with regtechs which is another one of our favorite topics. What are you seeing there in that space around what’s happening, what are the main drivers around where the investment is going there.

Emma Parry 15:07
Regtech is a fascinating sphere. And right now, so important. So I see three different drivers for investment in the reg tech space. One is obviously new regulations. So of course in the UK, we’ve got the new Consumer Duty coming up, it goes live at the end of July (2023). And that has really focused attention on some of the regtechs that help address the obligations. So I’m thinking things like product governance, GRC solutions, even some of the solutions that enable monitoring of digital channels, because one of the aspects around consumer duty that people are aware of is being able to identify vulnerable customers. And so if you have a tool that allows you to monitor the interaction between the client and the digital channel, you’ve got an immediate way to identify vulnerability if they’re hesitating on a particular screen or a particular field. So that would be the first thing. The second is obviously enforcement actions. So we’ve seen this particularly recently with the WhatsApp fines with the SEC and CFTC in the US. And that’s obviously brought focus again on surveillance technologies, e-comms channels, and making sure that that coverage is complete and accurate. And then the third thing is that regulators becoming much more, I’d say they’re getting better at publicizing their business plans and their enforcement priorities. And so that gives you the perfect ammunition for a business case, if you know that your local regulator is going to be focusing on X, Y, and Z and you know, you’ve got some deficiencies. So I think that’s really helping to drive the business cases as well.

Kimberley Cole 16:53
And any kind of top technology that you’ve seen at the moment that you’ve been looking at that you can share with us?

Emma Parry 16:59
Well, building on the WhatsApp scenarios, I’ve been working quite a lot recently with those e-comms surveillance, and also trade surveillance, regtechs particularly, they’re having their moment in the sun, they’re getting the investments, they’re doing the successful raises. But to be fair, they are offering a tremendous capability across the different e-comms channels. And, you know, in the trade surveillance face in terms of being able to match the behavioral scenarios, to the products that these firms are trading in. And that’s a tremendous step forward from where we were, say, five years ago or so.

Kimberley Cole 17:39
Interesting, really interesting. And what are you seeing emerging with sort of the conduct regulators?

Emma Parry 17:47
Now, this is a really interesting space. So one of the areas that regulators are focusing in on is AI, both from a, oh, my goodness, is it ethical, but also they’re exploring and testing with it themselves. So they are looking at AI as a capability enhancer for their own surveillance capabilities, their own monitoring of the market. So very, very interesting. But also it sets a higher benchmark for firms. So the regulators are now saying to firms, well, we’re using AI, are you? And that’s really an interesting space. Because certainly when I’ve met with the FCA a number of years ago, now, there was not that sort of pressure around technology. There was an almost an acceptance that we were living on spreadsheets, and there wasn’t that pressure. But there is now!

Kimberley Cole 18:43
It’s going to be interesting in terms of all of the skill sets that people need as well.

Emma Parry 18:48
Absolutely. The other thing I’m seeing with the regulators is research into behavioral science. So we’ve seen this with the FCA here in the UK also in Australia with ASIC and also in Canada with the OSC, all three of those regulators and probably others have undertaken research into gamification tactics used by online trading platforms. So these are the types of tactics where, for example, you’re seeing a leaderboard on the trading platform of the top performing individuals. And you can follow their trading patterns. So that’s one tactic they use. And another quite simple one is when you place a trade or buy or sell, you can get confetti coming down across the screens to celebrate the fact you’ve spent money. And so these regulators are looking at that and looking at whether those gamification techniques are actually encouraging people to trade more, or potentially to trade outside of their normal strategy and into higher risk products. So there’s some really interesting statistics and insights from those research papers.

Kimberley Cole 20:02
Hmm, interesting. So if you’re going to summarize the key takeaways from a conduct perspective for the audience, what are those things that they should have front of mind or they should be thinking about given our conduct unbecoming topic?

Emma Parry 20:19
Absolutely. So I think there’s a few things one is, and I’ve seen this over the last couple of years, since we’ve got out of the pandemic is the regulators are on the case around the risks to retail investors. So they are looking at the social media platforms they’re looking at, and discovering investment scams and fraudulent activity. And in fact, there’s a story which I love, where the Australian regulator ASIC actually went into a chatroom in Telegram and disrupted a market manipulation scheme. They declared themselves Hello, this is ASIC, we’re monitoring all 300 of you, and you could be in serious trouble. And they’ve now deployed that as a common tactic that they will use. So disruption campaigns. I love it. I think that’s fantastic. So regulators, you know, they’ve gone from being a little sort of potentially dusty, and backwards to being actually quite agile in terms of addressing this. So that’s point number one, if you’re running a scam, the regulators are going to be coming after you pretty quickly. And I think from a firm perspective, the focus is also around the culture. So we’ve spoken about regtechs and the capabilities, the technologies that are available, but the regulators and firms themselves are looking at culture, and how that influences behavior. And so that would be the other thing that I would say is top of mind, for firms and for regulators.

Kimberley Cole 21:53
Good takeaways. Thank you very much. So now just our favorite little wrap up section that we do here. So I’m just going to start with, what’s your outlook for the year ahead? Are you positive, negative or neutral?

Emma Parry 22:09
I was thinking about this, I actually think I’m actually quite a positive person normally, but I’m actually feeling a bit negative. And I’m just looking at in terms of the impact of the cost of living, the impact on people’s mortgages continuing to go up, and so on and so forth. And seeing the stresses in terms of vulnerable customers. And I don’t, unfortunately, think we’ve seen the end of it. And I’m not really seeing the continual interest rate hikes as doing anything apart from causing hardship. And I’m not an economist, but I’m kind of struggling with that one. So a bit negative, unfortunately.

Kimberley Cole 22:49
And then hopefully a bit more positive. What’s a book to read something to watch and a podcast you recommend?

Emma Parry 22:56
Okay. This is where we talk about some of the great people that I’ve met through LinkedIn. So in terms of the book, I would recommend Roger Miles, Dr. Roger Miles, he has published a book called Culture Audit. It explores behavioral science, both from what the regulators are expecting and doing, but also what firms need to be doing as well. So if you are in financial services, interested in conduct and culture, that’s a must read.

Kimberley Cole 23:24
That sounds like a great one for our mini book clubs that we need to establish.

Emma Parry 23:29
Absolutely. In terms of podcast, I’m a big fan of Christian Hunt, he does a podcast called Human Risk. And he brings to life compliance and ethics in a way that’s very down to earth and his podcast’s guests range from people who have been in trouble and have been in jail for conduct, misconduct challenges, let’s put it that way through to behavioral science academics, through to other people who’ve just got these really amazing insights into how compliance can go wrong. Because essentially, what we’re telling to people is, don’t do this, but we get the unintended consequences of people actually doing that. So that’s the podcast. In terms of watching I kind of struggle with this because I’m not doing much watching what I’m doing is going to in person events, and it’s just so wonderful to be able to meet people and talk to them face to face. So my recommendation is if you can go to the in person events, because you’ll get so much from it.

Kimberley Cole 24:33
Agree. I think we’re all Zoomed out after COVID

Emma Parry 24:38
Absolutely.

Kimberley Cole 24:39
And if you had a magic wand, and you could change one thing, what would it be?

Emma Parry 24:46
Just the one?

Kimberley Cole 24:47
Yeah.

Emma Parry 24:49
I was gonna say, I wish for a bigger wand and change more. Since you’re gonna give me just one thing to change. It would be the diversity and inclusion, making sure that we do have better representation in financial services firms in particular, but across the board, not just at the top on the board, but through the ranks as well. Because you want to develop products and services that actually meet the needs of the community. And the community is diverse. So why wouldn’t you want a diverse product management team or diverse compliance teams to be doing that properly. But also, we know that diversity brings stronger and more robust culture, and ultimately also helps the bottom line. So that would be my one thing to change.

Kimberley Cole 25:41
Fabulous. We love that. And what is your key message thought or quote that you would like to end on to inspire our risky women?

Emma Parry 25:51
Ah, well, I have a quote. And it’s from TS Eliot. And I thought this would kind of good for the risky women out there. And it goes like this. “Only those who risk going too far can possibly find out how far they can go.” And I thought that was rather wonderful given I’ve come a long way in my career, both from a role perspective, but also geographically, and I am a bit of a risk taker. And so my parting advice or guidance to the risky women is take a risk.

Kimberley Cole 26:22
Fabulous, we love it. Thank you, Emma Parry, for being our risky woman today.

Emma Parry 26:27
It’s been my absolute pleasure. Thank you for the opportunity.

Kimberley Cole 26:32
Thank you for listening to this episode of Risky Women Radio, be part of the ongoing conversation and learn more about our events and other programs at riskywomen.org