The FCA has launched its delayed Business Plan, which sets out the main areas of focus for 2020/21. The regulator has stated that it recognises it may be weeks or months before the UK is in a more stable position and the FCA can engage more fully with the plan.
Throughout the pandemic, the FCA will:
- protect the most vulnerable – ensuring that they can get the financial services and the help they need
- tackle scams – helping consumers avoid the scams that spring up as the pandemic develops
- ensure fair treatment for consumers and small firms – making sure that firms give strong and clear support to customers, recognising challenges that everyone is facing
- keep markets working well – ensuring that markets remain orderly
- mitigate firm failures – mitigating 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.
We aim to ensure 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
- 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 FCA will review its plans as the implications of coronavirus become clearer and provide updates as appropriate.
FCA Interim Chief Executive, Chris Woolard, 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.’
Meanwhile, here is some industry comment and analysis;
Paul Dyer, Head of Regulatory Risk and Assurance at Huntswood said: “It’s clear that the FCA has been forced to prioritise short-term interventions given the coronavirus pandemic. This raises a broader concern that with many areas put on hold until the current crisis is averted, consumer harm will undoubtedly persist in other areas and may even be exacerbated by the crisis.
“However, the affordability of credit has been emphasised by the FCA as part of an immediate focus on core services, and supported by the instruction for firms to proactively identify at risk consumers and show forbearance. This is a huge ask for the sector, particularly given current market conditions. Further guidance from the regulator is needed but firms must evolve and improve the fairness of their business models if they hope to succeed in the long-term.
“In particular, the regulator appears to have fired a warning shot at smaller firms that have previously flown under the regulatory radar. With more assertive action promised and an investment in the FCA itself, all businesses will find the fairness of their business models under scrutiny. Firms must ensure that their services adhere to these expectations and vulnerable customers are treated appropriately if they do not want to add regulatory intervention to their list of challenges.
“It is ironic, but understandable, that the FCA’s focus on operational resilience has been delayed due to the impact of coronavirus and a more immediate need to demonstrate resilience right now. The pandemic has highlighted the importance of this work and firms should plan to supply ‘surge’ capacity in future, partnering with credible and skilled third party partners to support customers in times of acute need.”