For interim chief executive Christopher Woolard, it’s been something of a baptism of fire. Andrew Bailey has departed to become the new Governor of the Bank of England, leaving Mr Woolard to take over the Financial Conduct Authority’s top job just before lockdown came into effect.

In the latest FCA podcast, Mr Woolard focuses on changes to the regulatory environment caused by Covid-19, and how the FCA and firms might learn from the unprecedented and unexpected changes that have taken place.

One of the FCA chief’s key messages is that firms must ensure they continue to provide high-quality customer service. This overriding requirement applies even though some staff may be absent from work, while others have been instructed to work from home.

Mr Woolard said that the steps the FCA had taken to respond to the crisis generally fell into one of three categories:

  • Measures to ensure support is provided to customers, such as interest-free overdrafts and payment freezes on loan repayments
  • Interventions to ensure the financial markets continue to operate effectively
  • Attempts to obtain judicial rulings on Business Interruption Insurance policies, and to what extent these provide cover for firms during a pandemic

Mr Woolard revealed that 1.7 million people have applied for a mortgage payment holiday since the new FCA measures were announced and that some banks and building societies have received requests from one in five of their mortgage customers. He estimates that 40% of these 1.7 million people are still experiencing financial difficulty as a result of coronavirus.

He added that customers should resume repayments, at some level, where they were able to do so, but also recognised that some people were experiencing real hardship, especially where their finances were already in a poor state prior to the pandemic.

Turning to the changes at the FCA caused by Covid-19, Mr Woolard said most of his staff had been working at home for the last 10 weeks, and that the FCA had postponed around two-thirds of the work it was planning to do. He stressed, however, that supervision and enforcement activities continue to be carried out.

The FCA chief highlighted that coronavirus may have made some consumers more susceptible to scams. For example, if an individual sees the value of their pension pot fall dramatically as share prices fall, they may be more willing to accept a tempting offer of switching it for supposed higher returns.

In the final section of the podcast, Mr Woolard explained some of the changes he wanted to see at the FCA. Many of these relate in some way to technological advances:

  • Understanding changes in firms’ business models and how these could both benefits customers and give rise to additional risks
  • How the regulator can use ‘Big Data’ to more effectively supervise firms (Lexico.com defines Big Data as “extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions”)
  • Reviewing the data the FCA collects from firms via regulatory returns and how this might need to change

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