The Financial Conduct Authority said it wishes to become “a more innovative, adaptive and assertive regulator”, as it issued its Business Plan for the 2021/22 financial year.
The FCA promises to be accountable for its progress on issues including:
- Ensuring firms start with high standards and maintain them
- Investing £120 million in the regulator’s data strategy over the next three years, using data to identify issues at an earlier stage
- Tackling misconduct
- Being active on issues related to the regulatory perimeter
- Enabling consumers to make informed decisions
The FCA’s priorities in consumer markets include:
- Strengthening rules on investment financial promotions
- Improving pension advice standards
- Campaigning to raise awareness of scams and high-risk investments
- Introducing a new Consumer Duty for firms to act with a duty of care to their customers
The FCA notes that it needs to adapt to a changing consumer landscape – one where, according to the regulator’s research, the majority of UK adults now display one or more characteristics of vulnerability. 27% of adults now have ‘low financial resilience’, which means they have low earnings and/or low levels of savings and/or high levels of debt.
The regulator’s specific priorities for the consumer credit sector include:
- Affordable credit should be available to consumers
- Consumers must not become over-indebted with unaffordable debt
- Consumers can take control of their debt at an early stage when they experience difficulties
The Business Plan also states that the FCA expects to see firms in consumer credit taking action to reduce complaint volumes. The regulator says it is also considering whether to make some of the temporary credit rules introduced in response to Covid-19 permanent.
FCA CEO Nikhil Rathi said:
“The FCA must continue to become a forward-looking, proactive regulator. One that is tough, assertive, confident, decisive, agile. One that acts, acts fast—and where we can’t act, engages enthusiastically with those who can. Continuing to be more innovative, assertive and adaptive.
“Over the next 18 months you will continue to see an FCA that looks and feels even more different. One that operates differently, partners differently, and communicates differently. One that delivers market integrity and delivers for the consumers that we serve. One that is not only purposeful but that is fit for purpose.”