FCA sets out growth-focused strategy

What does this mean?

2025-30 Strategy

The strategy focuses on four themes, as follows.

A more efficient and effective regulator

The FCA says it will change the way it supervises, with less intense supervision for those firms “demonstrably seeking to do the right thing”. The regulator says more firms will have a direct contact point with the FCA, and it will “significantly streamline” how it sets supervisory priorities. The regulator also reiterates its commitment to review the data it collects from firms. 

Supporting growth

To support growth and productivity, the FCA will adopt an “increasingly tech-positive approach”. The FCA notes that, where possible, it will rely on existing standards, focusing on outcomes rather than introducing prescriptive new rules.

The regulator also details plans to progress Open Finance, with an initial focus on small business lending, and plans for regulatory foundations for the first scheme by the end of 2027.

Helping consumers navigate their financial lives

The FCA stresses the importance of trust and disclosure, underpinned by the Consumer Duty, to increase consumers’ confidence and ensure they get the right support to make decisions. It will review certain rules (such as mortgage affordability requirements) to allow for product innovation and widened access. 

The FCA states that having set higher standards (one of three focus areas in its previous strategy), now is the time to “look again at our collective attitude to risk”. It says acknowledgement is needed that while the majority of consumers may benefit from reforms such as targeted support proposals, a minority may not get the outcome they hoped for. 

Fighting financial crime

This remains a long-standing FCA priority. The FCA signals a renewed focus on supporting firms in the use of technology-led systems and controls, and ensuring consumers have the tools to protect themselves. 

In addition to these focus areas, the FCA indicates that firms should expect greater fragmentation of international rules. Given heightened geopolitical instability, the regulator says it may choose to make progress on certain issues with a smaller group of like-minded jurisdictions. 

Feedback Statement FS25/2

The FCA sets out an ambitious programme of work to simplify its rules and guidance in discrete areas.

Review foundations

The FCA will seek views on whether conduct rules should apply to firms serving customers outside the UK, starting with a review of the insurance sector. It will also look to make consistent core definitions such as those for retail customers and SMEs.

Future-proofing disclosure

The FCA plans to increase flexibility in disclosure requirements for retail banking, including mortgages and savings, to allow firms to tailor communications to customers and channels.

Reducing the administrative burden

The FCA plans to launch a consultation in summer 2025 on changes to commercial and bespoke insurance regulation (following its earlier discussion paper). It also plans to review the requirement for asset managers to publicly report their value assessments, and to clarify the application of the Consumer Duty through retail distribution chains. 

Streamlining requirements

The FCA plans to pilot the introduction of specific guidance for smaller firms, later this year. It will also seek to clarify historic supervisory communications by withdrawing most Dear CEO and portfolio letters issued before April 2022. In addition, the FCA will explore options for reviewing the Senior Management Arrangements, Systems and Controls sourcebook. 

What do firms need to do?

The FCA’s updated strategy signals a shift in regulatory tone and approach. Further details are still to be set out by the regulator, but its commitment to efficiencies and a technology-positive approach is welcome. Firms should consider opportunities to: manage regulatory change more efficiently and effectively through the deployment of technology and analytics; drive operational efficiencies through innovations such as tokenisation; and develop new products and services through the introduction of new frameworks such as open finance.  

The FCA continues to move from prescriptive rules to more principles and outcomes-based requirements, which places greater accountability on firms to interpret and meet the spirit of the rules, and to justify their decisions and the outcomes they deliver for customers. The FCA’s plans to increase flexibility in its disclosure rules is a clear example of this. Firms should consider any changes that may be required for digital journeys in particular, and be ready to demonstrate a robust approach to testing, monitoring and adapting communications to support understanding and good customer outcomes. 

At a time of heightened geopolitical instability, the FCA’s indication that it may make progress with smaller groups of like-minded jurisdictions suggests firms should prepare for greater regulatory fragmentation. Businesses operating across borders will need to keep pace with this shift, while ensuring their UK operations remain fully aligned to the FCA’s expectations.

Next steps

The FCA is due to publish its 2025/26 Business Plan, which will set more detailed priorities and initiatives for the next 12 months, in early April 2025. 

The FCA plans to share an update on its programme of work to simplify its rules in September 2025.