FCA Five-Year Strategy for 2025 to 2030

The FCA has recently published its strategy for 2025 to 2030, with the following key aims: (i) being a smarter regulator, (ii) supporting growth, (iii) helping consumers navigate their financial lives, and (iv) fighting financial crime. It has also published its annual work programme, which sets out how it intends to achieve these four aims.

Being a smarter regulator

The FCA indicates that it will become more predictable, purposeful and effective. In order to achieve this, it is seeking to improve its processes and embrace technology to become more efficient and effective. While it currently sets detailed firm-specific two-year programmes for the largest firms, it will adopt a more flexible approach and apply less intensive supervision to those seeking to do the right thing. The FCA intends to share more insights from its supervisory work to help regulated firms to learn lessons. In terms of efficiency, the FCA is looking to streamline its portfolio of cases by focussing on the more serious cases. Finally, the FCA also intends to be more proportionate and easier to engage with – for example, it will constantly review what information it asks for to ensure that it is only collecting information that will be used.

Supporting growth

Following the introduction of the secondary competitiveness and growth objective in June 2023, and recent headwinds in this direction, the FCA emphasises that financial services regulation should aim to enable informed risk taking, not to eliminate it – attempting to do the latter would stifle innovation and competition and would hinder economic growth. 

To support growth, the FCA plans to support improvements in productivity and to take a more tech-positive approach. The FCA suggests that, where possible, it will rely on existing standards focussing on outcomes, rather than introducing new rules in relation to AI and technology. It will also ensure that consumer protection work first considers the Consumer Duty rather than requiring new rules. 

The FCA will reform rules in relation to commercial insurance and strip out redundant requirements – indeed, on 16 April 2025 it published CP25/8, in which it seeks to remove certain reporting requirements.¹ Finally, it is working with the Financial Ombudsman Service and the Treasury to modernise the redress framework following a Call for Input last year.

Helping consumers navigate their financial lives

The FCA aims to continue work to ensure that those who buy insurance benefit from fair value and competition, referencing the study into pure protection products it also announced last month. The Consumer Duty will continue to be integral to how regulated firms treat customers, and the FCA intends to work with industry to boost trust and product innovation and to ensure that the right information and support is available for consumers.

Fighting financial crime

The FCA will increase its work with firms and other agencies in order to tackle financial crime. The FCA intends to build a new data-led detection capability to bring together data sets to identify financial crime in regulated firms. 

Further comment from the FCA – international co-operation

Finally, the FCA recognises that it has long taken a role in various international forums. However, in a heightened era of geopolitical instability and competition, the FCA could choose to make progress on some issues with a smaller group of like-minded jurisdictions. It acknowledges that there may be difficult choices if the standards set in global agreements and through multilateral bodies are not comprehensively implemented globally. The FCA has recently established a presence in the US and Asia-Pacific to provide a local point of information for firms keen to be authorised in the UK.

HFW comment

It is clear that the FCA is focussed on streamlining its processes, promoting innovation and reducing the regulatory burden. This is in contrast to its 2022 to 2025 strategy, which focused on reducing and preventing harm, and setting and testing higher standards. No doubt a large factor in this change is the continued pressure by the Labour government to promote economic growth in the UK financial services industry. It will be interesting to see how the FCA continues to balance its competing regulatory objectives as it implements its new strategy, and whether the public will forgive or be sympathetic towards the FCA’s new approach if there is an event which adversely affects a large number of consumers. 

Footnote

1. See our article on CP25/8 here.