The Financial Conduct Authority (FCA) has torn up its original business plan for next year and published a shorter, sharper version, setting out the regulator’s priorities for the year ahead given substantial impact of the challenges presented by the coronavirus pandemic
The FCA says it will focus on ensuring that financial services businesses give people the support they need, that people avoid scams, and that financial services businesses and markets know what the regulator expects of them.
The plan states: ‘We have delayed other activity we had planned, where we judge that it was not urgent and may have distracted firms from the immediate priority. This has made planning for the year ahead much harder.
‘We have set out in the business plan the priority areas on which we will work over the next one to three years, as well as other cross-cutting and sector work.
‘Where we can progress this work now, without undermining the focus on the coronavirus response, we will do so. But we recognise that it may be weeks or months before we are in a more stable position and can turn ourselves fully to the activities in this plan.’
Throughout the pandemic, the FCA says it aims to protect the most vulnerable – ensuring that they can get the financial services and the help they need; help consumers avoid the scams that spring up as the pandemic develops; ensure fair treatment for consumers and small firms; keep markets working well; and work to mitigate the impact on consumers where firms fail in these challenging circumstances.
Looking ahead to the medium term the business plan sets out four priority areas where the FCA will address continuing harm.
These are ensuring that consumers can rely on safe and accessible payments to receive their pay or benefits, settle bills and access cash; do not get into unaffordable debt and are treated well if they do; can make effective investment decisions about their savings, and are not exposed to risky or poor value products; and are offered fair value products in a digital age and are not at risk of being treated unfairly in the pricing and other terms they receive.
The FCA is also focusing on transforming its operations. This includes looking at its entire system, from the data it collects, to how it analyses, manages and shares intelligence across the organisation, and how it decides which firms and individuals can operate.
It will also look at how firms are supervised, and how unacceptable firms and individuals are stopped and removed from the regulated sector as quickly as possible.
To deliver these outcomes, the FCA will build its capacity by investing in skills, systems, people and technology. The regulator says it will review its plans as the implications of coronavirus become clearer and provide updates as appropriate.
Chris Woolard, FCA interim chief executive, said: ‘In a matter of weeks, coronavirus has altered the UK’s financial landscape dramatically.
‘At times like this it is more important than ever that the FCA leads the way on the protection of consumers, firms and the markets.
‘Our business plan recognises the impact of coronavirus on the financial services industry, while looking forward at how we transform the FCA’s operations in future.’
Sarah Isted, PwC partner, said: ‘The priorities announced in the FCA’s annual business plan underscore the extent to which the Covid-19 pandemic has fundamentally changed the financial landscape in the short and medium term.
‘The four priority areas for the next one to three years are all heavily influenced by the impact of the COVID-19 outbreak, with a focus on protecting consumers, particularly the vulnerable, from emerging risks and market changes.
‘Beyond Covid-19, the FCA continues to prioritise climate change, technology, operational resilience, financial crime and culture.
‘It’s also significant that the FCA is focusing on transforming its approach to regulation and its operations. It wants to be able to make faster and more effective decisions, focusing on outcomes. The FCA’s need to transform has been hastened by the Covid-19 outbreak and it’s encouraging to see that it is embracing the challenges that lie ahead.’
David Miller, Partner, KPMG, said: ‘It’s clear the FCA has been very fleet of foot in responding to Covid-19, this plan isn’t a cut and paste of what it would have been working on to date, it’s specific to the new environment firms are operating in. For one thing, its 26 pages represent a notably abridged version of what they would typically release.
‘This response to Covid-19 could prove a useful blue-print for being more proactive, pragmatic, outcome-focused as a regulator; the FCA has clearly streamlined a range of ongoing activity into four key macro priorities.
‘However, a balance will need to be struck between the short term aim of protecting customers and firms versus the more ambitious objectives of transforming its own operations and the regulatory framework.’