The Financial Conduct Authority (FCA) has launched a five-year strategy aimed at strengthening consumer protection, fostering innovation, and enhancing efforts to combat financial crime.

The regulator outlined four key priorities in its strategy: becoming a smarter regulator, supporting sustained economic growth, helping consumers navigate their financial lives, and tackling financial crime.

The FCA said it plans to improve its processes and leverage technology to become a more efficient and effective regulator, ensuring it is predictable, purposeful, and proportionate in its approach.

It also aims to stimulate economic growth by enabling investment and innovation while maintaining the UK’s competitiveness in financial services.

Alongside this, the FCA will collaborate with the industry to boost trust, drive product innovation, and ensure individuals have access to the right information to make informed financial decisions.

In its fight against financial crime, the authority pledged to take stronger action against firms and individuals who misuse regulatory status to cause harm, as well as support firms, to be an effective line of defence.

Commenting on the launch of the strategy, FCA chair, Ashley Alder, said: “We want to deepen trust in financial services and shift our collective attitude across financial services to risk.

“Too often the focus has been on the risks of a decision taken rather than the lost opportunity of taking none. We want to change that so we can spur growth and improve lives.”

FCA chief executive, Nikhil Rathi, added that the FCA’s four priorities reinforce one another and said the authority “looks forward” to collaborating with its partners as it becomes a smarter regulator, supports growth, helps consumers, and fights crime.

“We are ambitious for the future and committed to enabling a fair and thriving financial services market for the good of consumers and the economy,” he said.

The strategy also includes plans to reduce regulatory burdens for firms seeking to do the right thing, significantly streamlining how it sets its supervisory priorities, and reviewing whether it can stop requiring certain data returns.

In addition to this, the FCA intends to digitise and simplify the authorisation processes, so it is easier and quicker to apply, the information received is better quality, and follow-up requests are reduced.

As part of its broader transformation, the FCA plans to invest in its technology, people, and systems, in particular through supporting its people to build their digital capability and adopt new approaches to allow it to better handle the 100,000 cases it assesses every year.

It suggested that doing this will enable the FCA to act faster and more assertively where harm is greatest.

The strategy also includes the integration of the Payment Systems Regulator and an expansion of Open Banking into Open Finance.

The FCA believes this will facilitate seamless data sharing, unlock product innovation, and reduce consumer costs while offering greater financial choice and transparency.

The new strategy builds on the FCA’s previous advancements in its previous three-year strategy.

These include making the largest changes to the listing regime in over three decades so it is easier for companies to raise money, introducing the Consumer Duty to set higher standards of consumer protection, authorising firms that meet the regulator’s high standards more quickly, and keeping more potentially harmful firms out of financial services.

Rathi stated that the last strategy set “high” standards and “bolstered” the authority’s operational effectiveness.

“We are committed to going much further, delivering at pace to meet the scale of change we are facing over the next five years,” he said.

“This strategy sets out our priorities, how we’ll become more efficient and effective and make the choices that shape the financial system.”

Association of British Insurers (ABI) director general, Hannah Gurga, supported the focus of the strategy, stating: “The FCA’s latest strategy sets a positive direction for the future of regulation.

“We fully support its focus on encouraging growth through investment and innovation, and its intention to be a predictable, purposeful, and proportionate regulator. This will be crucial to provide certainty for our industry and its customers.

“And it’s encouraging that the FCA's immediate areas of action include ensuring its approach to the Consumer Duty supports both effective competition and innovation, as well as providing fair value for consumers.

“We look forward to seeing more detail on this later this year.”

She also welcomed the FCA’s commitment to working with the industry to help consumers navigate their financial lives and its renewed focus on combatting fraud and financial crime.

Given this, the ABI encouraged the FCA to use its full suite of supervisory and enforcement powers to disrupt illegal activities and welcomed the opportunity to work with the authority to equip consumers with the information they need to better protect themselves from scams.

“We’ll continue to work together with the regulator, our members, and the wider industry to deliver good outcomes for customers,” she said.

However, Just Group group communications director, Stephen Lowe, raised concerns about whether consumers in the pension sector are receiving adequate support in their financial decision-making.

“The FCA’s strategy acknowledges that some risk is good even if it means a minority will not get the outcome they hoped for,” Lowe said.

“So long as firms and advisers are doing the right thing – that is, adhering to their obligations under the Consumer Duty and other rules – then the system has done its job.

However, with the upcoming 10-year anniversary of pension freedoms, Lowe noted that many individuals still struggle to navigate their financial futures, and the decline in the use of regulated advice remains a concern.

“Certainly, use of regulated advice by people accessing pensions has fallen so there is a lot riding on the success of the changes likely to be brought in following the advice-guidance boundary review although that is still some way off,” he added.

“So, we welcome this five-year strategy and look forward to seeing its measures come to fruition.”

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