Nikhil Rathi, CEO of the Financial Conduct Authority (FCA), laid out the future challenges and priorities the financial regulator would face. In a speech given at the Lord Mayor’s City Banquet at Mansion House, London, he discussed what the FCA expects to deal with, and the moves the organisation intends to take.
Moving forward following the pandemic
It is no exaggeration to say that the past year was truly unprecedented times. First came the trials of the pandemic, and the UK also had to deal with the end of the Brexit transition period. This period saw up to 5.8 million temporary payment deferrals for credit cards, loans, and mortgages. These have now been phased out without causing acute or undue stress to customers, and the economy can start moving forward.
With £1bn of insurance payments having gone out to small businesses thanks to the ongoing business interruption insurance case, they are in a good position to work towards overcoming the challenges set out thus far. With hopefully a stronger economic and employment period coming soon, there will be plenty of opportunities for them to overcome the challenges that have been presented to them.
One area where the FCA wishes to make changes comes with punishing misconduct and financial crimes. On occasion, they have been accused of not acting quickly enough, and so they wish to make changes if possible.
Such changes will include them litigating them more, and paying closer attention to some of the regulatory framework in place. By keeping close ties with the government, it might be prudent for them to make changes that will result in a much bolder approach when it comes to taking down criminal enterprises.
The FCA is also determined to create a system that creates a standard that meets both British regulations and international ones. With new sectors forming all the time, there is a strong chance that they will attract interest from international investors.
By working with the Financial Stability Board, IOSCO, and other organisations, they have been able to align different legislative approaches. This has also led to a consultation with the Treasury regarding Wholesale Market Regulation. The reforms proposed for these moves will give international corporations the understanding that the FCA will continue to be a global and market-leading entity regardless of the challenges faced.
The way in which data and digital infrastructure is used is always changing, and this is reflected in how the FCA is choosing to manage this area. Their Innovate services, including their regulatory sandbox, has been used by over 700 firms. Through this, the sandbox has also served as a blueprint for 44 regulators around the world. As the need for data-heavy approaches grows, the FCA will continue to look into ways in which they can standardise practices and deliver regulatory reporting at a lower cost.
As the FCA begins to put these stances into practice, it is vital that companies ensure that they are compliant with the latest regulations. Get in touch with Neopay to find out more about maintaining compliance in these areas.