Unlike Y2K, the risks of non-FSA compliance are known

I read with interest your comment on two recently published reports suggesting that the scale of changes needed for Financial Services Authority authorisation was being exaggerated by those who would benefit from exaggeration, and drawing a parallel with the Y2K changes (PM, 26 February, p11 and 64).

Indeed there are parallels with Y2K. Failure to change even a single system or electronically controlled machine to cope with Y2K could have had major repercussions, such as being unable to transact business. In that respect, FSA regulation is similar, as a failure to change will put businesses at risk of closure.

But the risk and uncertainty with Y2K came from not knowing what the repercussions of non-compliance might be. This, in turn, fuelled rumours of global meltdown. With FSA regulation, however, we are spared the uncertainty.

Insurers and brokers have a simple choice - change properly and professionally to comply with the new rules, or stay in complacent denial and bet on your company not being caught.

Consultancies like mine are helping people to comply, but this is not by exaggerating the risk of non-compliance, rather a long-term commitment to keeping our clients in business.

John White, Chairman, Winchester White Management Consultants.