Operational objectives
The FCA's operational objectives revolve around protecting consumers, preserving the integrity of the UK financial system, and promoting effective competition. These objectives are underpinned by a secondary goal to facilitate the international competitiveness of the UK economy while adhering to international standards.
Strategic focus areas
The FCA's 3-year strategy focuses on three core areas:
- Reducing and preventing serious harm: This involves proactive measures to identify and mitigate risks, prevent financial crime, and ensure firms adhere to regulatory standards.
- Setting and testing higher standards: The FCA aims to establish and enforce elevated standards across the financial services sector through robust supervision and regulatory interventions.
- Promoting competition and positive change: Encouraging innovation, competition, and positive market dynamics to deliver better outcomes for consumers and drive growth in the financial services industry.
Challenges ahead
Despite some positive economic indicators, uncertainties persist in the global economic and geopolitical landscape. Factors such as higher interest rates, inflationary pressures, and geopolitical tensions pose challenges to financial stability and market resilience.
Focus areas for 2024/25
The FCA's priorities for the coming year are aligned with its strategic objectives and the prevailing external environment. These priorities include:
- Protecting consumers: Emphasising the implementation of the Consumer Duty, enhancing consumer financial wellbeing, combatting fraud and scams through innovative technologies like Artificial Intelligence (AI), and ensuring pension products deliver value for money.
- Ensuring market integrity: Strengthening oversight of financial markets, finalising capital markets' reforms, and investing in data and technology to enhance market surveillance and enforcement capabilities.
- Promoting effective competition: Continuing efforts to foster competition and innovation, identifying areas for improvement in market dynamics, and advocating for market reforms that benefit consumers.
- Supporting international competitiveness and growth: Embedding the secondary objective to facilitate the international competitiveness of the UK economy, attracting investment, promoting innovation, and streamlining regulatory processes to encourage market participation and expansion.
Detailed commitments and actions
The FCA outlines specific commitments and actions across various domains, including:
- Reducing and preventing financial crime through targeted interventions, data-driven strategies, and collaborative efforts with industry partners.
- Putting consumers' needs first by enforcing the Consumer Duty, enhancing complaints-handling processes, and improving access to financial products and services.
- Strengthening the UK's position in global wholesale markets through regulatory updates, innovation support, and market integrity initiatives.
- Enhancing regulatory frameworks, tackling market abuse, managing firm failures, advancing environmental, social, and governance (ESG) priorities, shaping digital markets, improving redress mechanisms, and minimising operational disruptions.
Expectations from firms
Firms operating in the financial services sector are expected to align with regulatory requirements, prioritise consumer protection, uphold market integrity, and actively contribute to fostering a competitive and resilient financial ecosystem.
The FCA's 2024/25 business plan underlines its commitment to safeguarding consumers, promoting market integrity, and driving positive change in the financial services industry. By addressing current challenges, implementing strategic initiatives, and collaborating with stakeholders, the FCA aims to ensure a robust and dynamic financial sector that supports economic growth and prosperity in the UK.
If you have any concerns or queries about any of the Business Plan focus areas, contact DWF Regulatory Consulting for an initial discussion.
