The Banking SMF Market

Banks and building societies carry the most demanding version of the Senior Managers and Certification Regime. Two regulators are involved, the board is assessed as a whole as well as individually, and the list of Senior Manager Functions and Prescribed Responsibilities is the longest in the regime. Appointments at chair, chief executive, chief finance and chief risk level often involve regulator interviews and months of planning.

SMF Capital focuses on the part of the market that the global search firms serve least well: smaller and mid-sized banks, specialist lenders, challenger banks, building societies, and the UK branches and subsidiaries of overseas banks. These firms face the full dual-regulated regime with fewer resources, and they compete for the same small pool of experienced deposit-taker Senior Managers as the largest banks.

Senior Manager Functions at Dual-Regulated Firms

At banks and building societies, functions are divided between the Prudential Regulation Authority and the FCA.

• PRA-designated functions cover most senior leadership and the board: the Chief Executive, Chief Finance, Chief Risk and Chief Operations functions, the Head of Internal Audit, the Chair, committee chairs and the Senior Independent Director.
• FCA-designated functions include executive directors not otherwise covered, compliance oversight and money laundering reporting, and Other Overall Responsibility.

Each regulator approves its own functions with the other’s consent. The PRA’s requirements are set out in the PRA Rulebook.

What the Regulators Look For

Prudential Expertise

For PRA roles, competence is judged against the firm’s safety and soundness. Capital, liquidity, credit risk, and recovery and resolution planning carry significant weight in the fit and proper assessment.

Collective Suitability of the Board

The PRA wants the board as a whole to have the knowledge, skills and experience to oversee the firm’s risks. A strong individual candidate can still raise questions if they duplicate existing skills while a gap remains elsewhere.

Conduct and Financial Crime

The FCA focuses on customer outcomes, the Consumer Duty, vulnerable customers, complaints and financial crime. Its designated functions need candidates with retail banking conduct experience.

Interviews

The PRA frequently interviews candidates for significant roles. Candidates who know the firm’s capital and liquidity position, supervisory priorities and key risks in their area perform best.

How We Run Banking SMF Searches

Every search starts from the Statement of Responsibilities the new Senior Manager will sign and any Prescribed Responsibilities they’ll carry. We build the specification around that accountability rather than a job title, then approach candidates directly and in confidence. Most of the strongest candidates aren’t actively looking, and many already hold approvals at competing firms.

Before anyone reaches your shortlist, we test them against the fit and proper test: prior approvals, regulatory history, directorships and financial soundness. We start regulatory references early, because late references are one of the most common causes of delay. For deposit-taker roles, we also consider how each candidate would strengthen the board’s collective suitability and prepare them for regulator interviews.

Adrian Lawrence FCA interviews every shortlisted candidate personally, and we stay involved until your new Senior Manager is approved and in post. For a realistic view of the stages, see how long an SMF appointment actually takes, and for the full service, our SMF recruitment services page.

The Senior Roles We Recruit

Chief Executives

We recruit chief executives for smaller banks, specialist lenders and building societies who combine commercial leadership with credibility in front of both regulators.

Chief Risk Officers

Experienced deposit-taker CROs are in short supply, particularly for smaller firms and societies outside London. We approach candidates directly and plan for a longer search.

Heads of Internal Audit

The Head of Internal Audit function needs a strong audit background, independence from the executive and standing with the audit committee. Many strong candidates are settled in their roles, so these searches depend on direct approaches.

Chief Operating Officers

Operational resilience, outsourcing and technology change make the Chief Operations function central at modern banks. We recruit SMF24 holders who have led resilience programmes and major change.

Compliance Officers and MLROs

We place FCA-designated compliance and MLRO holders with retail banking experience in the Consumer Duty, vulnerable customers and financial crime.

Chairs, Committee Chairs and Non-Executives

Board appointments carry Senior Manager Functions and shape the board’s collective suitability. Our sister practice NED Capital specialises in non-executive and chair appointments, and we work together where a board role requires approval.

Smaller Banks and New Entrants

Smaller banks and new entrants face the full dual-regulated regime with lean teams. The PRA has developed a simpler prudential framework for smaller domestic deposit takers, but the Senior Managers regime still applies in full, and governance expectations remain high. Common challenges include recruiting a CRO and head of internal audit willing to join a smaller firm, building a board with enough prudential and conduct depth, and managing key person dependency where one executive holds several functions. Firms growing towards a banking licence can plan their senior team through our SMF authorisation support.

Building Societies

Building societies are mutual organisations owned by their members, and boards must balance the interests of savers and borrowers rather than shareholders. Many societies have a strong regional identity, which narrows the local candidate pool for specialist roles. Non-executives need prudential expertise and an understanding of mutuality. The Building Societies Association represents the sector.

Planning a Dual-Regulated Appointment

• Allow enough time. Assessment periods, interviews and senior notice periods of up to six months can make the full process close to a year.
• Engage supervisors early for chair, chief executive and chief risk appointments.
• Update the board skills matrix before recruiting, so the appointment clearly strengthens collective suitability.
• Start references early. Candidates with long banking careers may need references from several firms.

Our article on how dual-regulated Senior Manager appointments work covers these points in more depth.

Other Sectors We Recruit For

SMF Capital recruits Senior Managers across the regulated market. Alongside this sector, we run dedicated searches for Wealth Managers & Advice Firms, Investment Managers & Hedge Funds, Consumer Credit Firms, Insurers, Brokers & MGAs, Payments, E-Money & Fintech and Crypto-Asset Firms. We also work with overseas firms opening UK branches and firms seeking FCA authorisation, in London, Birmingham, Bristol and across the UK.

Frequently Asked Questions

Do you recruit for large banks?

Our focus is smaller and mid-sized banks, specialist lenders, challenger banks, building societies and overseas bank branches. For the largest banks’ chair and CEO roles, global search firms are usually the incumbents, but we’re happy to discuss specialist or interim needs.

Can you provide an interim CRO or compliance officer?

Yes. Our fractional and interim SMF cover can bridge a vacancy while the permanent search runs, subject to regulatory approval where required.

Do you recruit for UK branches of overseas banks?

Yes. See our page on overseas firms and UK branches.

How long does a banking SMF appointment take?

Allow for the search, notice periods and up to three months for the regulators to decide a complete application, plus time for interviews. Our SMF appointment timeline explains the stages.