A series of commitments have been made in the Financial Conduct Authority’s business plan for 2024/25.
The plan, published this morning (March 19), set out the regulator's annual funding requirement is expected to rise by more than 10 per cent to £755mn, but this figure will be formally set in June.
The business plan sets out three objectives for the year ahead: to protect consumers, protect the integrity of the UK financial system and to promote effective competition in the interests of consumers.
An additional objective is to make it easier for the UK economy to be more competitive internationally.
We looked at four key points from the 2024/25 plan below:
AI to prevent fraud
The FCA has plans to use artificial intelligence to prevent fraud and scams.
It said it is developing its use of the technology which it hopes could improve the experience of consumers and firms who contact the regulator.
On preventing scams, the FCA said it will expand its intelligence-gathering capabilities and analytics to better spot and track more potentially fraudulent activity and reduce the average amount of money lost to scams.
The advice guidance boundary review is also taking place, which the FCA said seeks to support long-term financial wellbeing for consumers.
Over the next year, it will invest £1.9mn on its work on this legislation.
Building on consumer duty
The FCA said it wants firms to act in good faith towards consumers and avoid causing them foreseeable harm.
This builds on consumer duty which was rolled out in July 2023 and will be extended to closed products this July.
It wants firms to ensure consumers are equipped with the right information to make informed decisions about their products an services.
Work the FCA will carry out in 2024/25 relating to this includes multi-firm work and market studies to improve standards.
It is also expected to carry out a review of firms’ treatment of customers in vulnerable circumstances.
In addition, it will continue to test firms on their implementation of consumer duty.
UK as a global market.
With T+1 settlement rules set to be introduced this year, the FCA said it will support industry work on this transition.
It will mean most securities transactions will settle on the next business day following their transaction date.
The plan said: “We want the UK to continue to strengthen its position in global wholesale markets and also to host markets which support the domestic economy and growth.
“We want markets which are open to innovation, underpinned by high standards of market integrity and investor protection.”
The regulator also said it will “lead the debate” on how the right form of regulation can support growth for UK markets.
It said it will continue to invest in our data and technology to support rigorous market oversight.
Problem firms and firm failures
Other objectives from the regulator include cracking down on problem firms and reducing issues arising from firm failures.
This year, the FCA intends to increase its auto-detection capabilities of problem firms and individuals.
It hopes this would help speedily identify firms and, where necessary, cancel them.
The FCA expects firms failing to persist in 2024 and wants to respond quickly in cases where this happens.
It said: “As the increase in corporate insolvencies is expected to persist in 2024, we will continue to use data and horizon-scanning mechanisms to anticipate firms that are at risk of failure and make sure that we can respond appropriately in the event that they do to protect consumers and ensure market integrity.
“We will also continue to support industry by sharing relevant information we identify through our data, our new financial resilience return and our everyday work, such as examples of good and poor practice of wind down planning.”
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com.
