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First Things First: What Are The FCA’s Priorities For 2025-2030?

Reading through the recently launched 5-year strategy by the regulator, payments firms will come across four key points which emphasise the approach that the FCA will take to regulatory compliance:

1. Being a smarter regulator – embracing the ‘dramatic’ technological change in forms such as artificial intelligence (AI) is one of the ways in which the FCA seeks to improve its processes
2. Supporting growth – this tech-positive approach feeds into the FCA’s growth initiatives on delivering the National Payments Vision; as the Payment Systems Regulator and its functions are integrated within the FCA, the regulator discusses ‘rebalancing risk’ in a way that promotes safety whilst encouraging innovation and competition in the payments sector
3. Fighting financial crime – measuring success by slower growth in fraud cases and losses, such as the cases of authorised push payment fraud, and finding new mediums by which to communicate alerts of new scams to consumers to equip them with ‘the tools they need to protect themselves’

The fourth and final priority highlighted links back to this idea of ‘equipping’ consumers, with this priority being to help consumers navigate their financial lives. As Nikhil Rathi, the CEO of the FCA, prefaces in the strategy that ‘the UK’s financial services and those who depend on them will have to contend with serious issues’ when adapting to change and growth.

What Does ‘Improving Lives’ Prioritize For Payments Firms?

It means that more than ever, for consumers (with consideration for the end users in a distribution chain), the FCA expect firms to be considering the support and treatment received by these individuals so that they are able to succeed in this priority to guide consumers to sufficiently understand risks and rewards – benefitting from financial services securely.

Next Steps & Key Considerations

The FCA has set its final rules and guidance for Consumer Duty for a long time and emphasized across their ‘Dear CEO’ letters to payment firms, so the role of Consumer Duty as a compliance priority is very much explicit. However, in discussing separately their aims for consumers’ understanding, several points become apparent:

• Technology: Firms must consider the potential for information imbalance arising from varying financial capabilities in a consumer base, of whom are equally at risk by increased complexity in payments interfaces and technology.
• Accessibility: Equally, technology and innovation can open doors for facilities for consumer support, and firms must consider how to make their platforms adaptable and accessible to the varying needs of consumers exposed to their services.
• Dialogue: The importance of consumer feedback with strong client communication channels helps firms process whether clients are aware of the implications of the products and services they are buying into (as well as keeping firms updated on pertinent consumer risks, such as APP fraud). This inherently creates a business model that is not only compliant, but robust, growing through an active dialogue.

With the new strategy giving the FCA the opportunity to communicate its areas of focus for the next five years, it is important to consider how your firm can adapt to change from both a regulatory and industry perspective as the two become more even more closely intertwined. If you would like to further discuss any queries you may have from this article, please get in touch with the Thistle team and we can see how best we can support you.