The UK Financial Conduct Authority (FCA) Chief Executive Nikhil Rathi has issued a statement on the agency’s key achievements in the past couple of years. The update is part of a three-year strategy by the FCA to support financial services development while providing ample protection.
Rathi said their commitment to reducing harm remains unwavering, and their new Consumer Duty reaffirms this.
“From the digital frontiers where new opportunities and risks are fast emerging, to the competitiveness of UK markets, we are focused on staying ahead and have laid out proposals for far-reaching reforms across our remit. We know at the FCA our role is not just about regulating financial services, it’s about safeguarding futures, supporting innovation and informed risk-taking and maintaining a resilient financial ecosystem.”
The FCA points to the following accomplishments:
Consumer Duty: The Duty sets a higher standard of consumer protection across financial services and requires firms to put their customers’ needs first.
Tackling online harms: In September 2023, the FCA introduced new screening checks for firms approving marketing for unregulated firms and new financial promotions rules for crypto in October. Other examples include an InvestSmart Campaign, a consultation on “Finfluencers,” and social media promotions. As of December 2023, the FCA has removed over 10,000 potentially misleading adverts and sent out 2,243 warnings about unauthorized firms and individuals. The FCA also took down 26 ctypto ATMs across 34 locations that were suspected of operating unlawfully.
Setting higher standards: Examples include addressing low savings rates offered by some financial institutions and new rules on overdrafts. The FCA also outlined new rules to maintain access to cash.
Promoting competition and positive change: The FCA is pursuing a new secondary objective to promote competitiveness and long-term growth to help the UK compete globally. In October, the FCA published a discussion paper on AI to help assess the benefits and risks of AI and responsible adoption.
As financial services are a key industry in the UK and recognized as a top global financial hub, it is vitally important the regulators and other policymakers take a supportive approach to the sector. Not just a rule-upon-regulation approach aiming to remove all risk while jettisoning the good with the bad. This is not easy as the regulatory strategy is a balancing act of enabling innovators while battling fraudsters and systemic risk.