FSCS bids to cut compensation costs

FSCS bids to cut compensation costs

The Financial Services Compensation Scheme set out plans to reduce compensation costs over the next five years.

The organisation has published ts strategy for the 2020s as it prepares higher consumer expectations and increased complexity in personal finance.

In its strategy document, FSCS into the 2020s: Protecting the Future, published today (14 November), the FSCS outlined the challenges it will face in the coming decade, and how it will address them.

Among the aims the FSCS has set out is to reduce to cost of compensation by sharing what it has learned about the causes and consequences of major firm failures with government and regulators.

The FSCS said this would also improve regulation and prevent future failures.

Mark Neale, chief executive of the FSCS, said: "Our strategy for the 2020s spells out clearly the challenges we will face, our strategic priorities that will meet those challenges, and what we aim to achieve as we enter the 2020s.

"With rising customer expectations and increasing complexity in many aspects of personal finance, FSCS needs to adapt if we are to continue to provide a trusted compensation service which raises public confidence in the financial services industry."

The organisation said as its current five-year vision and plan is drawing to a close, it is seeking to build on the progress it has made by focusing on four priorities for the coming decade: preparation, protection, promotion and prevention:

On preparation, the strategy document stated: "The FSCS must be prepared to protect consumers when major failures occur if we are to play our part in underpinning financial confidence and stability."

The document stated the FSCS needed to protect consumers by building trust and confidence its service, adding: "That service must continue to guarantee the fast and automatic re-payment of deposits in failed banks, building societies and credit unions. It must provide prompt protection to insurance policyholders, including continuity of insurance cover itself wherever possible."