The Financial Conduct Authority (FCA) has published the results of its latest annual survey of how firms perceive its performance. It says it has improved on two counts, while also reporting that smaller firms are more satisfied than larger ones.
The FCA has three operational objectives:
• securing an appropriate degree of protection for consumers
• protecting and enhancing the integrity of the UK’s financial system
• promoting effective competition in the interests of customers
The survey results show that firms are slightly more satisfied, compared to last year’s survey, with the FCA’s efforts to meet the first two objectives. Firms are however slightly less likely to agree that the FCA is meeting its competition objective satisfactorily.
88% were confident that the FCA was delivering on its strategic objective of ensuring financial markets function well. This represents a slight increase from 86% in 2018.
When we then look at the firms’ perception of the FCA’s performance against the operational objectives:
• 86% rated the regulator positively on the consumer protection objective, up from 85% last year
• 87% approved of the FCA’s efforts to protect market integrity, up from 85%
• 70% said it was doing a good job on the competition front, down from 72%
Asked to rate their degree of satisfaction regarding their relationship with the regulator, the average score from the respondents was once again 7.6 out of 10, the same as last year, but this score has risen steadily since the score of 5.9 in 2013, the year in which the FCA became the UK’s principal financial regulator. Some of the larger firms though were less satisfied, as the average fixed portfolio firm – one that receives a greater level of supervisory attention – gave a relationship score of 6.9, and this was down from last year’s figure of 7.3.
The average score when firms were asked to rate the FCA’s overall performance was 7.2, up slightly from 7.1 in 2018, but fixed firms only gave an average score of 6.8. Consumer credit firms were among those giving the highest score – this sector gave the FCA an average score of 7.5 here.
Lenders gave very good average scores of 7.9 for the relationship measure and 7.6 for the overall satisfaction question.
Perhaps the area where fixed portfolio firms’ views differ most from flexible portfolio firms is the subject of cybercrime, possibly because more larger firms have first-hand experience of the incidents that can happen in this area. 65% of fixed firms think the FCA is doing a good job in working with firms to prevent cyber incidents, compared to just 33% of flexible firms. Flexible portfolio firms receive less regulatory scrutiny, and the majority of authorised firms fall into this category.
The regulator acknowledges that perhaps the area where firms are most unhappy is in their view of whether the FCA’s staff have the experience and qualifications required to carry out their supervisory work. 63% of all firms said they believed FCA staff had the right experience and qualifications, but this fell to just 52% for credit firms and 39% amongst firms in the pensions sector.
Pension firms also gave a lower average score for their relationship with the FCA (6.8) and for their overall satisfaction (6.9).
Once again, many firms called on the FCA to improve some aspect of its communications. 56% said the regulator could simplify its written communications to firms, 55% called for the Handbook to be simplified and 52% said they would welcome communications which were better targeted to specific types of firm.
The research was carried out by Kantar Public on behalf of the FCA. Between January and March of this year Kantar sent the survey to around 10,000 authorised firms, and 29% of these responded, up slightly from 26% last year.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article