The FCA has launched a new strategy to improve outcomes for consumers and in markets throughout the UK.
The three-year strategy prioritises resources to prevent serious harm, set better standards, and encourage competition, given the FCA’s large and rising remit. For the first time, the regulator will hold itself accountable for disclosed outcomes and performance measures.
Shutting down problem firms that do not meet basic regulatory standards is a significant component of the plan. The FCA is hiring 80 people to work on the project, which will safeguard consumers from potential fraud and bad treatment while also improving the market.
The FCA assessed during the formulation of the strategy that every pound spent on its operations benefits consumers and small businesses by at least £11. The regulator has also taken into account the rising cost of living, which may lead to increased demand for credit products and customers seeking innovative ways to manage and earn more money. In response to the situation in Ukraine, the FCA says it will continue to engage closely with the UK government and the Bank of England.
The plan builds on efforts started in July when FCA chief executive Nikhil Rathi pledged to make the regulator more innovative, forceful, and flexible, and to convert the FCA into a data-driven platform capable of facing future risks and possibilities.
Hargreaves Lansdown head of government affairs & public policy Anne Fairweather says: “The FCA has set out its focus for the next 3 years, rightly looking to reduce consumer harm, setting higher standards and promoting competition, putting metrics against these aims for the first time. This is a welcome step forward.
“In particular we welcome the fact that the FCA sees informed and empowered consumers as an important defence against bad conduct. Over time consideration needs to be given as to how this aim is measured. Data from firms, collated under the consumer duty, could really drive this ambition.
We would also want to see a wider ambition that consumers improve their financial resilience. Preventing harm, such as from investment in inappropriate high-risk products, is the first step here. But over the coming 3 years, using the consumer duty as a driver, we believe that firms can and should do more to improve the outcomes for consumers, ensuring that they are building their resilience over time.”
Rathi says: “Our new strategy enables the FCA to respond more quickly to the rapidly changing financial services sector. It will give us a foundation to continuously improve for the benefit of our stakeholders, and respond swiftly to economic and geopolitical developments.”