On 19 March 2024, the Financial Conduct Authority (FCA) published its Business Plan for 2024/25, setting out the work it will do over the next 12 months to help deliver its commitments in the third year of its 3-year strategy, with the aim of achieving better outcomes for consumers and markets.

The Business Plan highlights some of the challenges to the UK’s economic and geopolitical landscape which the FCA will be monitoring for the year ahead, including higher interest rates and persistent inflation, global financial risks, and geopolitical risks which have the potential to cause severe disruption. The programme of work is intended to enable the FCA’s continued work in delivering on the 13 commitments in its 3-year strategy.

Areas of focus for the FCA over the coming year include:

Protecting consumers

The FCA intends to continue testing whether firms are meeting the high standards set by the Consumer Duty, which it notes has already led to firms making changes to savings rates and fees. The Business Plan also explains that the FCA will seek to support consumers’ long term financial wellbeing through the Advice Guidance Boundary Review and making sure pension products deliver value for money.

Another key FCA activity in this respect is its multi-firm work and market studies across different sectors to drive up standards, which will start in 2024/25. This will include looking at unit-linked pensions and long-term savings products to test the transparency of charges across value chains, how firms assess overall product value and their response where they identify unfair value. The multi-firm work will also look at how swiftly the insurance industry responds to claims, including where customers are more likely to show characteristics of vulnerability. The FCA will also begin a review of firms’ treatment of customers in vulnerable circumstances in 2024/25.

Promoting competition and positive change

Another area of focus from the FCA’s 3-year strategy which is addressed in the Business Plan is the FCA’s efforts to promote competition to improve the attractiveness and reach of UK wholesale markets, by supporting firms to invest, innovate and expand. The FCA will also work to continue making it quicker and easier for firms to apply for authorisation. To further its commitment to strengthen the UK’s position in global wholesale markets, the FCA explains that it intends to encourage innovation and evolving markets by supporting industry work on T+1 settlement, with the aim of increasing efficiency.

Data and innovation

The Business Plan also flags the wider role of data within the FCA’s aim of becoming a world-class, data-led regulator by automating more of its analytics tools to help it detect and respond to consumer harms faster. It plans to build on its progress to date in working with firms on the safe deployment of artificial intelligence (AI), and to use data and horizon-scanning mechanisms to anticipate firms that are at risk of failure with the aim of protecting consumers and ensuring market integrity.

Reducing and preventing financial crime

Financial crime is another area of focus flagged in the Business Plan. The FCA notes that it has published two national strategic documents in the last 12 months – The Economic Crime Plan and the Fraud Strategy –  and confirms that it will continue to take a data-led approach to identify potential harm for supervisory and enforcement action. As such, the Business Plan flags that in 2024/25 the FCA will increase its investment in its systems so that intelligence and data is used more effectively within its financial crime work, so that it can target higher risk firms and activities. It commits to continuing to take assertive action to tackle scams and fraudulent websites and to work with partners to support system-wide improvements, as well as using its powers through the Office for Professional Body Anti-Money Laundering Supervision to improve standards in the legal and accountancy sectors.

Commenting on the 2024/25 Business Plan, Nikhil Rathi, Chief Executive of the FCA, said: “We’ve already made significant progress in delivering against the bold vision we set out in our strategy two years ago, including the game-changing introduction of the Consumer Duty and proposing the most far-reaching reforms to wholesale market regulation and the listing regime in decades. We remain resolute in supporting the vital role the financial sector plays in the UK’s long-term economic growth, embracing the potential benefits that technology presents both for us and the firms we regulate, while also continuing to protect consumers and ensure market integrity.”

New webpages

Alongside the Business Plan, the FCA has also published three new webpages:

  • The FCA’s approach to supervision, which sets out how it carries out its regulatory oversight including its rationale for supervision, how it supervises, its supervisory principles and its decision-making framework.
  • The FCA’s approach to consumers, which covers how it uses its powers and tools to protect consumers of financial services, in line with the FCA’s consumer protection objective.
  • The FCA’s approach to competition, which explains the FCA’s objectives and duty in relation to competition, how it identifies potential harm caused by a lack of competition, how it diagnoses the cause of such harm, potential remedies and how it measures the impact of its work.
  • The FCA’s approach to international firms, which sets out the standards expected from international firms that provide financial services in the UK, or that are preparing to apply for full UK authorisation.