The FCA has recently published its own business plan for the 2023/24 accounting year. Much like the prior year’s iteration, it is intended to provide an update to regulated firms, institutional, professional investors and consumers on the FCA’s progress on its own targets as it continues to build a regulatory framework aimed at assisting the UK in remaining a world leading financial centre. The business plan is designed to assist the FCA to set clear standards, support economic activity and also retain strong protection for investors at every level.
The plan is by the FCA’s ever-present priorities: preparing financial services for the future; putting consumers needs first; reducing financial crime and strengthening the UK’s position in global wholesale markets. With those outcomes in mind, with the backdrop of rapid development in technology and digitisation, the plan outlines the FCA’s areas of focus for the foreseeable future:
- People at the FCA
- FCA Locations
- Data and Technology
- Who the FCA work with
- Deferred payment credit
- Annual funding requirements at the FCA
Financial services for the future
The Future Regulatory Framework (FRF), announced in 2022, is key to this year’s plans. Implementing the outcomes of the FRF review is a core part of the FCA’s commitment to prepare financial services for the future. The FCA will work with the Treasury and other regulators on the repeal of retained EU law and replace where appropriate, obligations currently found in that law with Handbook rules. These rules will be adapted so they better suit financial markets in the UK. This is a very significant programme of work, with demanding timetable both for the FCA and market participants over the coming year. It will help ensure that the FCA can continue to advance its operational objectives while encouraging the UK’s wider economic growth and international competitiveness in line with its secondary objective.
No doubt these adapted rules will require technical analysis and impact assessment by firms prior to proportionate implementation, as necessary. Centralis GRC will provide its thoughts on the potential impact on investment firms and fund managers as they emerge.
The FCA announced last year it’s ambition to become a data-led regulator, and it is making progress across a number of data and digital programmes. These include investment in cloud technology, implementing new digital capabilities and designing new data solutions to support them with their communications with regulated firms. “Our ambition this year is to complete a major upgrade to our core regulatory system and improve our intelligence capabilities through the automation of analytics tooling, helping us detect and respond to consumer harms faster. We are making further investments in cyber security and operational resilience, to ensure our services are secure by design, improving technical stability and efficiency for our staff and regulated firms.”
Centralis GRC will monitor progress diligently, to ensure the way we harness and work with client data ensures best practice and useful outcomes for our clients when working with the regulator. A key driver for the regulators data transition is to be more effective by harnessing data, converting it into actionable intelligence and improving real time understanding of what’s currently happening and, crucially, of emerging market risks.
The FCA is keen to highlight its pragmatic outlook: “Financial services outcomes can be significantly affected by external factors, including the economy, changes in technology, wider innovation and consumer behaviour. Progress will not be immediate and will not be steady from year to year. Nevertheless, we challenge ourselves to improve outcomes in the medium term, although we recognise we cannot control all the factors which determine those outcomes. We also recognise that no metric is a perfect measure of the outcome and all metrics have some limitations.”
“Our Strategy is designed to be sufficiently agile to deal with and meet new challenges and opportunities. The markets we regulate are dynamic. Going into the second year of our Strategy, and with finite resources, we will keep prioritising our work to respond to these challenges.”
In a world where all organisations, including Centralis GRC and its clients, are working towards a digitised and data-led approach, a realistic and practical view from the FCA is welcomed.