FCA unveils its Annual Work Programme

What does this mean?

The FCA outlines how it will deliver on its strategic priorities and enhance the integrity, innovation and competitiveness of UK financial services. Initiatives are structured around the regulator’s four strategic priorities:

• A smarter regulator: more efficient and effective

• Supporting growth

• Helping consumers navigate their financial lives

• Fighting financial crime.

A smarter regulator: more efficient and effective

The FCA is streamlining regulatory interactions to reduce the burden on firms, including by reviewing information requests and enhancing the new My FCA platform to centralise tasks and payments. Continued work to digitise the authorisations process will improve firms’ experience and enable faster decisions.

Supervisory and intelligence capabilities will be enhanced by focusing on fewer high-priority areas, adopting a more flexible approach for firms ‘demonstrably seeking to do the right thing’, and increasing transparency around market risks and opportunities. Engagement with influential firms and stakeholders will also be deepened.

Detection and response to harm will be strengthened by changing internal processes, using digital tools to identify high-risk firms and networks, and aligning internal operations more closely with strategic priorities. Faster action will follow where higher-risk cases are identified.

Supporting growth

A wide-ranging programme seeks to support UK growth by boosting competitiveness, productivity and innovation across financial services, including: 

• Unlocking capital investment and liquidity: reviewing capital requirements for specialised trading firms, simplifying conduct rules for commercial insurers, progressing pension reform, and researching the links between financial regulation and growth.

• Accelerating digital innovation to improve productivity: embracing a digital-first approach, supporting firms on artificial intelligence (AI) adoption, considering new digital service standards, consulting on changes to the £100 contactless limit, developing the regulatory framework for open finance, and working with the Payment Services Regulator to deliver the National Payments Vision.

• Reducing the regulatory burden: streamlining data collection, as well as rules, guidance materials and wider communications and ensuring future consumer protection work will be guided by the Consumer Duty (before new rules).

• Providing certainty and predictability: clarifying the approach to motor finance redress and working with the FOS and HM Treasury to modernise the redress framework.

• Enabling firms to start up and grow: expanding support for early and high-growth firms, providing a dedicated authorisations case officer for every firm in the regulatory sandbox, enhanced pre-application services to wholesale, payments and crypto firms, and working with HMT to create a streamlined framework for limited regulated activities.

• Promoting UK exports and inward investment: supporting the UK’s position as a global hub for financial services and sustainable finance, consulting on rules for ESG ratings providers as well as International Sustainability Standards Board (ISSB) and transition plan disclosures, and establishing a presence in the US and Asia Pacific.

Helping consumers navigate their financial lives

The FCA will promote the development of innovative solutions to enhance consumer resilience, including through its Innovation services, and will work with Government to bring Deferred Payment Credit products into the regulatory perimeter. A priority will be designing a rules framework for ‘Buy Now Pay Later products’.

The FCA also reiterated a long list of existing activity, including the AGBR, embedding Consumer Duty, pensions reform, financial inclusion, the mortgage rule review and two insurance market studies.

Fighting financial crime

The FCA will strengthen its approach to financial crime through a new data-led capability to improve detection and enable timely intervention. Additionally, the regulator will step up efforts to disrupt organised crime and prevent money laundering through enhanced collaboration and data sharing with partners.

What do firms need to do?

The FCA’s emphasis on growth, competitiveness, and innovation is clear throughout the workplan and underpins its broader five-year strategy. Firms should actively engage with this agenda and consider how best to capitalise on opportunities, particularly around the use of emerging technologies such as AI, to support innovation and contribute to the UK’s growth ambitions. 

Firms should also consider each relevant existing and new initiative, alongside responding to the FCA’s evolving supervisory model.  Firms need to be aware of areas of focus, and able to contribute to wider debates where the FCA seeks to reform rules or approaches.  

A robust approach to the Consumer Duty remains essential. As the foundation for future consumer protection regulation, firms should ensure the Consumer Duty is fully embedded across their business. In line with the FCA’s tech-positive agenda, firms should actively explore how technology and data can be harnessed to strengthen their capabilities in monitoring, evidencing, and delivering good consumer outcomes.

While the work plan offers limited detail, firms should not overlook the Sustainable Finance agenda. Firms should stay alert to upcoming developments, including ISSB-aligned reporting and Sustainability Disclosure Requirements, and consider best how to prepare.

Next steps

The UK regulators are expected to publish an updated version of The Grid, which details a full list of their planned activities, this quarter.