FCA unveils new strategy to ‘support growth’

The watchdog’s strategy, published today (25 March) focusses on four priorities:

1. Be a smarter regulator: predictable, purposeful and proportionate. The FCA will improve its processes and embrace technology to become more efficient and effective.
2. Support sustained economic growth, by enabling investment, innovation and ensuring the continued competitiveness of the UK’s world-leading financial services.
3. Help consumers navigate their financial lives by working with industry to boost trust, product innovation and ensuring the right information and support is available for people to take financial decisions.
4. Fight financial crime, focusing on those who seek to use the fact they are regulated to do harm. It will go further to disrupt criminals and support firms to be an effective line of defence.

Ashley Alder, chair of the FCA, said too often the regulator’s focus had been on the risks of a decision taken rather than the lost opportunity of taking none.

Alder said: “We want to change that so we can spur growth and improve lives.”

We are ambitious for the future and committed to enabling a fair and thriving financial services market for the good of consumers and the economy.

Nikhil Rathi, CEO of the FCA, pictured, said the regulator’s last strategy, which resulted in the introduction of the Consumer Duty, set high standards and bolstered the watchdog’s operational effectiveness but added the latest plan would go much further “delivering at pace to meet the scale of change we are facing over the next five years”.

Rathi said: “Our four priorities reinforce one another and we look forward to collaborating with our partners as we become a smarter regulator, support growth, help consumers and fight crime.

“We are ambitious for the future and committed to enabling a fair and thriving financial services market for the good of consumers and the economy.”

Strategy promises

The strategy states the FCA will take a less intensive approach to keeping tabs on “firms seeking to do the right thing”, streamline how it sets supervisory priorities, and review whether it can stop requiring certain data returns.

The watchdog also committed to digitising and simplifying the authorisation processes, a process that resulted in it taking many months to approve the merger between Markerstudy and Atlanta last year.

The regulator reckons the new approach will make it easier and quicker to apply, ensure the information received is better quality and follow-up requests are reduced.

The regulator also stated it will invest in its technology, people and systems to allow it to better handle the 100,000 cases its supervisors assess every year.

As the FCA integrates the Payment Systems Regulator and many of its functions, the watchdog promised it will build launch open finance to allow for more seamless data-sharing that could unlock product innovation and deliver lower costs and more choice for consumers.

Jonathan Herbst, global head of financial services at law firm Norton Rose Fulbright, said the FCA’s message is a steady as she goes reiteration of a proportionate and predictable approach. 

Herbst said: "The message is that there will be change but it will be measured and not knee jerk. This is surely welcome and is an antidote to the narrative that there is some magic wand solution towards deregulation. 

"Steady as she goes may not sound exciting but it may be the right message for the regulators to send in a period of instability.”

The strategy comes after Rathi kicked off 2025 by writing to prime minister Sir Keir Starmer to promise growth would be a “cornerstone” of the regulator’s work through to 2030, and less than a month since he began the Association of British Insurers conference by promising to reduce unnecessary regulatory burdens and launch less large-scale rule changes in the next five years.

Rathi’s repeated promises come after Sam Woods, CEO of the Prudential Regulation Authority, also wrote to Starmer to state his watchdog would support the Labour government’s growth goal but added his organisation’s primary objective was “to promote safety and soundness of banks and insurers”.