On 26 June 2023, the FCA published a speech by Emily Shepperd, its Chief Operating Officer and Executive Director of Authorisations, delivered online at the Westminster Business forum. The speech focuses on cultural evolution and how culture must change to meet expectations.
In her speech, Ms Shepperd highlights how culture remains central to the FCA’s supervisory model, noting that firms with healthy cultures will be best equipped to adapt to a changing world and to consumers with changing expectations.
The speech highlights the following points:
- At a senior level in financial services, you need to pass and continue to meet the conditions of a fitness and propriety assessment; this includes consideration of honesty, integrity and reputation.
- Through its work on sustainability disclosure requirements and investment labelling, the FCA is determined to clean up ‘ESG’ and ‘sustainability’ classifications to restore credibility and confidence to the system.
- The higher standard required by the Consumer Duty and the shift to focusing on customer outcomes will require a significant change in many firms’ cultures. For example, firms’ boards and senior management, if they have not already, will have to embed a culture in which good outcomes for consumers is central. People management policies and practices, including performance management, pay and bonuses will be critical to doing so.
- Acknowledging the criticisms concerning the time taken to process authorisations, the FCA has taken action to slash its queues by 60 percent. It is piloting an approach to application forms and other data-driven tools, with user experience as a major influencer to speed up its processes, without diminishing the thoroughness of its checks.
- As part of its client-centric approach, the FCA is offering guidance to firms in its sandboxes that want to become authorised. Then, once authorised, the FCA will further help firms through their early and high growth oversight initiative.
- New FCA offices have been opened in cities outside London, in order to contribute to the country’s levelling up initiative.
- The FCA wants to empower consumers to make the right choices and to avoid increasingly sophisticated scams, and it is doing this through its ScamSmart and InvestSmart campaigns.
- There are plans to set out further proposals for diversity and inclusion in the coming months.
- To help tackle misconduct in wholesale markets, the FCA wants firms to take their regulatory referencing far more seriously, including extending probationary periods, adding extra monitoring or restricting activity if necessary.