A few months ago, the FCA published its 2024/25 Business Plan.
There were no real surprises in it, which was to be expected as it is the third year of the FCA’s CEO, Nikhil Rahi’s, 3-year strategy.
The FCA says that the planned programme of work builds on recent progress made to become a “more outcomes-based, assertive and data-led regulator”.
Unsurprisingly, priorities focus on the Consumer Duty, particularly on protecting consumers by testing if firms are meeting the new requirements. Additionally, the FCA aims to contribute to UK competitiveness and growth and build on the significant progress it has already made to become a world-class data-led regulator, by automating more analytics tools to help detect and respond to consumer harms faster and working with firms on the safe deployment of artificial intelligence.
The FCA will have a workforce of more than 5,000 by the end of March 2024 with an indicative annual funding requirement for 2024/25 of £755m, an increase of 10.7%.
It will continue to deliver the 13 commitments in its strategy, which focuses on preventing serious harm, setting higher standards and promoting competition.
Specific commitments it will prioritise include:
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reducing and preventing financial crime;
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putting consumers’ needs first, with a focus on the Consumer Duty, cost of living pressures and vulnerable customers; and
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strengthening the UK’s position in global wholesale markets.
Of greater relevance to the network are two additional commitments: “Improving the redress framework,” and “Improving oversight of Appointed Representatives.”
Under the “Improving the redress framework” commitment, the FCA states, “We want to ensure that consumers receive appropriate and efficient redress where things go wrong, the Claims Management Companies (CMC) sector delivers fair value and that firms that cause harm bear more of the cost of redress.” It refers to the discretionary commission arrangements, “We will continue our work on historic discretionary commission arrangements in the motor finance market, during the ongoing pause in the deadline for firms having to resolve complaints and our analysis of the issues and the legal steps which may be necessary. We aim to set out our next steps on this in Q3 2024.”
Under the “Improving oversight of Appointed Representatives” commitment, the new rules and guidance that came in at the end of 2022 aim to improve principals' oversight of their ARs, increase the information provided and raise standards across financial services. The FCA will use this data to target high risk principals and ARs and will continue to strengthen its scrutiny and engagement with principal firms as they appoint ARs.
ITC has a constructive relationship with the FCA, which ITC uses to try and ensure that FCA regulation and supervision is proportionate whilst ensuring that customers get good outcomes. As always, ensuring good outcomes for ITC’s firms remains the top priority.
