The FCA has published its 2017/18 business plan. Areas of focus across the financial services sector for 2017/18 include the following:
- firms’ culture and governance. The FCA’s focus continues to be on the most significant drivers of behaviour. These include senior management accountability and remuneration, and the steps firms and their senior managers take to address any risks cause by their behaviours. The FCA is interested is interested in the direction of travel of firms’ cultures and whether indicators suggest that progress is being made. The FCA will continue to support and drive cultural change across the industry;
- financial crime and anti-money laundering (AML). Following the FCA’s Financial Crime Annual Data Return in 2016, the FCA will analyse the early responses to make sure it’s focusing its supervision on the right firms. Where firms have poor AML controls, the FCA will use its enforcement powers to impose business restrictions to limit the level of risk, provide deterrence messages to industry or both. The FCA will generally use its civil powers, but if failings are particularly serious or repeated, it may use its criminal powers to prosecute firms or individuals;
- promoting competition and innovation. The FCA’s aim for 2017/18 is to find ways to further improve Project Innovate’s value and impact by: (i) one-to-one assistance to innovate businesses in regard to the regulatory implications of their expected innovations as quickly and frankly as possible; (ii) continuing to provide bespoke regulatory feedback through its Advice Unit to businesses planning to offer automated advice to the mass market and publishing resources to help firms develop robo-advice services; and (iii) continuing to publicise and explain the innovation-friendly benefits of UK regulation to fintech clusters around the world and build mutually productive relationships with fintech regulators in key jurisdictions;
- technological change and resilience. The FCA is building its own expertise in resilience and cyber crime, continuing to develop and evolve its regulatory tools and increasing its engagement with individual firms and other stakeholders such as trade and other industry bodies. The FCA will engage with the industry to regularly exercise a collective response to a range of scenario that might cause a major operation disruption;
- treatment of existing customers. The FCA will approach issues relating to existing customers on a sector basis. Examples include: (i) shopping around and switching; (ii) wake-up packs; (iii) the FCA’s response to the Competition and Markets Authority review of retail banking; (iv) work on the strategic review of retail banking business models; (v) cash savings market study remedies; (vi) firms’ pricing practices; (vii) maturity of interest-only mortgages; (viii) customers with long-term mortgage arrears; and (ix) debt management sector review; and
- consumer vulnerability and access to financial services. Following its future mission document, the FCA will prioritise consumers who are unable to shop around over consumers who can shop around but choose not to do so. The FCA is developing its vision for consumers as part of its forthcoming “Consumer Approach” document, which will set out how the CA meets its consumer protection objectives over the next 3-5 years. In the mortgage sector, the FCA will be looking at customers with long-term mortgage arrears and at interest-only mortgages approaching maturity. The FCA will also continue to focus on preventing scams, especially related to pensions. Its work will also look at new products and services that could benefit vulnerable consumers and increase access to financial services.
View FCA 2017/18 business plan, 18 April 2017