Credit, Collections & Insolvency News
The Financial Conduct Authority (FCA) has launched a new five-year strategy which aims to deepen trust, rebalance risk, support growth and improve lives.
The FCA says it will focus on four priorities:
Ashley Alder, Chair of the FCA, said “We want to deepen trust in financial services and shift our collective attitude across financial services to risk. Too often the focus has been on the risks of a decision taken rather than the lost opportunity of taking none. We want to change that so we can spur growth and improve lives.”
Nikhil Rathi, Chief Executive of the FCA, said “Our last strategy set high standards and bolstered our operational effectiveness. We are committed to going much further, delivering at pace to meet the scale of change we are facing over the next 5 years. This strategy sets out our priorities, how we’ll become more efficient and effective and make the choices that shape the financial system.
“Our 4 priorities reinforce one another and we look forward to collaborating with our partners as we become a smarter regulator, support growth, help consumers and fight crime.
“We are ambitious for the future and committed to enabling a fair and thriving financial services market for the good of consumers and the economy.”
The strategy sets out how the FCA will change how it supervises to be more efficient. This includes taking a less intensive approach for those firms seeking to do the right thing, significantly streamlining how it sets its supervisory priorities, and reviewing whether it can stop requiring certain data returns. It will also digitise and simplify the authorisation processes, so it is easier and quicker to apply, the information received is of better quality and follow-up requests are reduced.
The regulator also plans to invest in its technology, people and systems. It will support its people to build their digital capability and adopt new approaches to allow it to better handle the 100,000 cases its supervisors assess every year. This will enable it to act faster and more assertively where harm is greatest.
As the FCA integrates the Payment Systems Regulator and many of its functions, it will build on the success of Open Banking and launch Open Finance. This will allow for more seamless data-sharing which could unlock product innovation and deliver lower costs, more choice and better information for consumers.
The new strategy builds on the FCA’s achievements over the course of its previous 3-year strategy. These include making the biggest changes to the listing regime in over 3 decades so it’s easier for companies to raise money, introducing the Consumer Duty to set higher standards of consumer protection, authorising firms that meet the regulator’s high standards more quickly, and keeping more potentially harmful firms out of financial services.
David Brooks, Head of Policy at consultancy Broadstone said “The FCA’s latest Strategy for the coming five years marks a doubling-down of two emerging priorities in the financial services market for both consumers and institutions – the encouragement for greater risk-taking and increasing desire to stimulate investment in the UK stock market.
“Currently, the FCA estimates that 70% of adults aged 18-54 have a pension in accumulation and just over half (56%) of consumers with £10,000 or more in investible assets hold any mainstream investments. It is aiming to grow these metrics to address low financial capability, build financial resilience and help consumers plan for the future.
“It is positive to see fighting financial crime and scams as another key plank of the FCA’s five-year plan, given the immense financial damage this can cause as well as the wider impact it has on a person’s wellbeing and confidence.
“The FCA states that it is aiming to strip back unnecessary costs to drive growth and create improved consumer outcomes, but there is likely to be nervousness around the extent to which consumer protections are diminished such as its review of mortgage affordability requirements.”
