The FCA has launched a new five-year strategy which it hopes will deepen trust in financial services, rebalance risk, support growth and improve lives. 

Nikhil Rathi, FCA chief executive, said the strategy will aim “to enable a fair and thriving financial services market for the good of consumers and the economy."

The regulator said it will focus on four priorities: 

• Be a smarter regulator; predictable, purposeful and proportionate. The FCA will improve its processes and embrace technology to become more efficient and effective.
• Support sustained economic growth, by enabling investment, innovation and ensuring the continued competitiveness of the UK’s world-leading financial services.
• Help consumers navigate their financial lives by working with industry to boost trust, product innovation and ensuring the right information and support is available for people to take financial decisions.
• Fight financial crime, focusing on those who seek to use the fact they are regulated to do harm. It will go further to disrupt criminals and support firms to be an effective line of defence.

Ashley Alder, chair of the FCA, 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."

Mr Rathi said the FCA’s previous strategy “set high standards and bolstered our operational effectiveness.”

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

The strategy sets out how the FCA will change how it supervises to be more efficient. That includes taking a less intensive approach for those 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.

It said it will also 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.

The regulator said it also plans to invest in its technology, people and systems.

As the FCA integrates the Payment Systems Regulator and many of its functions, it said it will build on the success of Open Banking and launch Open Finance. That will allow for more seamless data-sharing which could unlock product innovation and deliver lower costs, more choice and better information for consumers, the regulator said.

The strategy comes as the regulator announced how it will follow up on its call for industry to identify ways to simplify and streamline its rules and reduce burdens on businesses.

David Brooks, head of policy at consultancy Broadstone said the new strategy "marks a doubling-down of two emerging priorities in the financial services market for both consumers and institutions – the encouragement for greater risk-taking and increasing desire to stimulate investment in the UK stock market."

He said it is positive to see fighting financial crime and scams as another key plank of the FCA’s five year plan given the financial damage it can cause as well as the wider impact it has on a person’s wellbeing and confidence.

He said: “The FCA states that it is aiming to strip back unnecessary costs to drive growth and create improved consumer outcomes but there is likely to be nervousness around the extent to which consumer protections are diminished such as its review of mortgage affordability requirements.”

Stephen Lowe, group communications director at retirement specialist Just Group, said: “As a statement of intent, the FCA’s strategy covers all the bases we were expecting in terms of promoting growth, encouraging technological innovation, reshaping the system to deal with the ageing population and supporting people to make better decisions.

“One question inherent in regulation is how much consumers need to be protected from their own poor choices or bad luck. The FCA’s strategy acknowledges that some risk is good even if it means a minority will not get the outcome they hoped for."

Chris Cummings, Chief Executive of the Investment Association, said: “Rebalancing risk is key - the shift in regulatory approach demonstrates the regulator has listened to the calls from the IA to tackle ‘safetyism’ and recognised that there is a risk in consumers not taking decisions which could improve their future outcomes."

He said the IA want more people to benefit from investing "and will work with the regulator to achieve their target to see a higher proportion of consumers holding mainstream investments."