The FCA is now as much a "law enforcement agency" as a financial regulator, according to one of the authority’s executive directors.

In a speech this week on financial crime, Steve Smart, FCA joint executive director of enforcement and market oversight, draws parallels with his previous employer, the National Crime Agency.

He explained how the FCA was focusing increasingly on collaboration with other regulators and law enforcement agencies to stay ahead of criminals.

Early detection of potential harm to consumers was a key part of this anti-crime strategy, he said.

Speaking at the Financial Services Investigations and Enforcement Summit, he said: “We are always mindful of the need to constantly improve and evolve, to identify potential harm sooner, prioritise our response and progress our cases at greater pace.

“Across the FCA we are developing how the different strands of our organisation – enforcement, authorisations and supervision – work in a more integrated way to achieve this.”

He said this included working to pre-empt how criminals use new technologies such as AI and deep fakes in their scams.

Mr Smart joined the FCA in June 2023 after spending six years as director of intelligence at the NCA.

He told delegates the same approach has been followed from his previous workplace: “to follow the money.”

This includes following complex transaction trails and using asset-freezing and confiscation powers when the criminal source was reached.

Some progress was being made on financial crime, he said, revealing that reported frauds were down 16% from 2024 with nearly half a million fewer fraud victims in 2024. However fraud still accounts for nearly 40% of national crime, he said.

Demographics have also changed – the typical fraud target is now as likely to be 20-39 years old as 50-69. This has been reflected in the FCA’s enforcement figures, with ‘finfluencers’ featuring in the 21 individuals charged by the regulator in the past year.

Elsewhere, Mr Smart said work was being done to improve how the regulator authorises firms.

The FCA has been criticised in the past and while Mr Smart said the FCA “makes no apologies for high standards” it recognised that this process had been unnecessarily slow.

He said: “That is why we have worked hard to eliminate our operational backlog and are holding ourselves accountable to help reduce unnecessary delays at the gateway.” 

He used crypto firms as an example. In the past, some 86% of initial crypto registrations received were rejected, withdrawn or refused – often due to failing to meet anti-money laundering standards. This is now evolving with closer work with applicants and 44 crypto firms have now been registered, he said.