The Financial Conduct Authority has launched a three-year strategy to improve outcomes for consumers and financial markets in the UK.
The strategy aims to prevent serious harm, set higher standards and promote competition. For the first time the regulator will also hold itself accountable against published outcomes and performance metrics.
A key focus of the new strategy will be shutting down problem firms which do not meet basic regulatory standards. The FCA is also recruiting 80 employees to work on the initiative in an effort to protect consumers from potential fraud and poor treatment.
For every pound spent on its operations, the FCA has calculated that consumers and benefits will benefit by at least £11.
The new strategy comes amid a warning that the rising cost of living could drive greater demand for credit products and lead consumers to look for new ways to manage and make more of their money.
Nikhil Rathi, chief executive of the FCA, said: “Our new strategy enables the FCA to respond more quickly to the rapidly changing financial services sector. It will give us a foundation to continuously improve for the benefit of our stakeholders and respond swiftly to economic and geopolitical developments.”
Anne Fairweather, head of government affairs and public policy at Hargreaves Lansdown, hailed the launch a “welcome step forward.”
Fairweather said: “In particular, we welcome the fact that the FCA sees informed and empowered consumers as an important defence against bad conduct. Overtime consideration needs to be given as to how this aim is measured. Data from firms collated under the consumer duty could really drive this ambition.
“We would also want to see a wider ambition that consumers improve their financial resilience. Preventing harm, such as from investment in appropriate high risk products, is the first step here. But over the coming three years, using the consumer duty as a driver, we believe that firms can and should do more to improve the outcomes for consumers, ensuring that they are building their resilience over time.”
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