Preparing for an SMF Interview - Top Tips
Securing a Senior Management Function (SMF) role is a significant milestone in any financial services career, but it comes with serious regulatory scrutiny. One of the most important steps in the process is the interview with the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA), both of which have the power to approve - or deny - your appointment.
These interviews are not merely procedural; they are a critical assessment of an individual’s capability, competence, integrity, and understanding of their role within the regulated firm. Proper preparation is essential to ensure you can demonstrate your fitness and propriety to regulators.
Here’s how to prepare effectively and present yourself in the best possible light.
“By failing to prepare, you are preparing to fail”
Benjamin Franklin
1. Know Your Interviewers
Start by finding out who will be sitting across the table. You can often glean some intelligence about the interview panel through your firm's compliance team, peers, or public sources. Understanding their roles and regulatory priorities will help you anticipate lines of questioning and tailor your answers to their areas of focus.
2. Be Crystal Clear on Your Role and Responsibilities
You must be able to articulate your specific SMF role, the associated Prescribed Responsibilities, and the legal entities they cover. Make sure you can explain how your role fits within the wider governance structure. If you're stepping into the Chief Compliance Officer (CCO) role, for instance, be ready to define the boundaries between your responsibilities and those of the Chief Risk Officer (CRO) or Money Laundering Reporting Officer (MLRO).
3. Evidence Your Skills - And Acknowledge Development Areas
Demonstrate that you have the requisite experience, technical knowledge, and personal capability for the role. But be candid about any areas where you are developing, whether it's gaining deeper expertise in a particular regulation or strengthening your leadership approach. Regulators value self-awareness and a commitment to continuous improvement.
4. Articulate Your Motivation
The FCA and PRA care not just about what you can do, but why you want to do it. What drives you to take on this SMF role? How will your approach influence the firm's culture and governance? Be prepared to discuss your values, leadership style, and personal motivations in a way that resonates with the regulator’s focus on culture and conduct.
5. Bring Relevant, Real-World Examples
Expect behavioural questions that test your decision-making and leadership under pressure. The specific areas of interest will vary depending on your role, but you should prepare concrete examples to address each of these. For example, Non-Executive Directors will face very different questions to someone taking on leadership of the Retail Banking division. But whatever the role, regulators are looking for evidence that you will do the right thing and act in line with regulatory expectations.
For a CRO for example, these may include times that you have: provided robust challenge to senior colleagues; managed conflicts between stakeholder interests; or taken action to embed cultural or ethical improvements.
6. Demonstrate Technical Expertise
The regulator will expect a sound understanding of the technical components of your role. Whether it’s market risk models, cyber risk frameworks, or the requirements for retail financial products, be ready to showcase your grasp of the detail that is most important for your role, and explain how you apply that knowledge in practice to achieve good outcomes.
7. Understand the Regulatory Landscape
This means both the big picture and firm specific priorities. You should be familiar with:
· The key regulatory priorities in your sector (e.g. consumer duty, operational resilience, financial crime)
· The specific regulatory context of your firm, including any past issues or areas of supervisory focus
Being able to speak fluently about the wider environment demonstrates strategic awareness and shows the regulators that you understand their agenda.
If you are not currently employed by the firm for which you are taking on an SMF role, make sure that you have visibility of key documents like PSM and FE letters and other regulatory correspondence, and ask for a briefing from the regulatory affairs team, so that you have a full understanding of the current regulatory priorities and the nature of the relationship.
8. Demonstrate Risk Awareness
Risk management: Show understanding of the firm’s risk framework and your role in managing and mitigating risks, particularly those relevant to your SMF role (e.g., credit, market, conduct, operational, or financial risks).
Conduct and culture: Be able to explain how you promote a healthy conduct culture and ensure staff comply with conduct rules. This includes tone from the top, whistleblowing arrangements, and employee training.
Lessons from past issues: Be candid about previous incidents or regulatory scrutiny (if any), what was learned, and what changes were implemented.
9. Regulatory Engagement and Communication
Principle 11 / Fundamental Rule 7 are vitally important for the FCA and PRA respectively, underpinned by Senior Manager Conduct Rule 4. Regulators need to trust that you will engage with them openly and transparently and will bring issues to their attention in a timely manner.
Demonstrate that you understand their approach to supervision, their expectations and explain how you intend to engage constructively and transparently with regulators, highlighting examples of when you have successfully done this in the past.
10. Practice Makes Perfect
An SMF interview is not the time to wing it. Practice speaking clearly and confidently, using language that aligns with regulatory terminology. Rehearse likely questions and your responses with trusted colleagues or external advisers to refine your message and ensure your answers are pitched at the right level. Answers should be informative, relevant, and concise.
Final Thoughts
An SMF interview is a serious assessment of a candidate's readiness to take on a regulated role. Successful candidates combine technical knowledge, practical experience, and a demonstrable commitment to good governance and regulatory compliance. By thoroughly preparing, reflecting on your leadership style, and understanding the wider regulatory environment, you can approach the interview with confidence and credibility.
How We Can Help You
At Rise Regulatory Consulting, we have prepared numerous senior individuals for SMF interviews, providing guidance on what to expect, support with the creation of learning and development plans, and running practice interview sessions so that each individual is fully prepared before they walk into their regulatory interview.
Get in touch to discuss how we can help you.