All You Need to Know About FCA’s New Priorities For 2020-21

The Financial Conduct Authority (FCA), which is the regulatory body of all companies in the United Kingdom, has recently laid out its plans and set its priorities for the Financial Year 2020-21. Keeping in view the economic impacts of the Covid-19 outbreak in the country, the regulatory body’s strong message was about its priorities during the FY 2020-21, which involves minimising the damage that has been caused by Covid-19 outbreak and the lockdown in the nation, and how it was looking to support the companies in the United Kingdom to come out of these turbulent times. The FCA’s business plan for the upcoming year revolves around the challenges being posed by the Covid-19 outbreak and what its likely long term and short terms impact would be. Let us have a brief look at the overall business plan and the priorities that have been set out by the Financial Conduct Authority in the United Kingdom.

Financial Conduct Authority’s new business plan

The FCA has already taken decisive steps to counter the immediate shocks and urgent measures needed in the emergency coronavirus. The total focus was on moving with pace, with urgent and relevant decisions made in hours. It was also reported that the FCA would eventually take stock of those measures and put those on a more routine footing. They would also need to respond to the demographic effects on society in the longer term. It was highlighted that the FCA must concentrate their efforts on ensuring that:

• markets function well
• the most vulnerable are protected
• the impact of firm failure is minimised
• scams are tackled

and seek to ensure consumers and small firms are treated fairly

Four external goals have been identified, which the regulatory body would concentrate on over the next 1 to 3 years. They have highlighted the fifth goal too, which deals with their own transformation. Their transformation is the basis upon which the FCA can better achieve their other mentioned external goals. It will ensure the FCA is better prepared to fight the current as well as future challenges. The FCA also highlighted that they would report on the progress on these in their Annual Report and Accounts 2020/21. As with all other areas of the program, coronavirus is likely to significantly affect the shape and reach of the regulators’ operation.

Financial relief for Covid-19 affected

Another focus of the FCA is improving the payments system mechanism in the country as the payment systems market is rapidly developing. More businesses, innovative products and third-party suppliers are joining the market, with some businesses increasing their payments mechanisms to unprecedented levels. The FCA’s primary targets are to ensure that customers and small and medium-sized businesses (SMEs) are able to access different payment services in a secure manner. FCA is also worried that the emergency with coronavirus would affect the financial strength of payment companies and the willingness of customers to access cash and payment services. The FCA, as per its business plan, will work together with the Payment Systems Regulator (PSR), the Government, Bank of England (the Bank) and other regulators to achieve the 3 outcomes that they have identified in this area. They will be working specifically, in close association with the PSR to resolve specific issues such as cash access and fraud. The primary outcomes that the regulator has targeted are:

• Consumers should transact safely with payment firms
• Payment firms meet their regulatory responsibilities while competing on quality and value
• Consumers and SMEs have access to a variety of payments services

The FCA has also set up a plan to leverage innovation and technology even more in the coming year. They would invest in new technology as well as in gaining expertise so that they can make better use of data for secure and effective regulation. The FCA also plans to deepen their engagement with industry and society on artificial intelligence, specifically machine learning, and concentrate on how emerging technology can be used in a healthy, effective and ethical way.

The regulatory body also seeks to enhance its rules to deter money laundering and collaborate with domestic and foreign stakeholders to promote a collaborative approach to crypto-assets. It is likely that the FCA would want to use technology to reduce the burden of corporate regulatory reporting. They would replace the Gabriel program with a new data-gathering platform for businesses.

Highlights of the FCA’s plan to fight the coronavirus

While dealing with the coronavirus threat, the FCA would concentrate on ensuring that financial services companies provide the much-needed support, that customers can be saved from falling for any scams, and that financial services companies and markets know what is being expected from them. The FCA, other than the Bank of England and HM Treasury’s efforts has already made an unparalleled series of initiatives to protect customers, businesses and markets. They also ensured that consumers maintain access to vital banking facilities and can take advantage of flexibility on a mortgage and other loan payments.

The FCA has drawn plans, which it would be following throughout the period of the pandemic:

• protect the most vulnerable – ensuring that they can get the financial services and the help they need
• tackle scams – helping consumers avoid the scams that spring up as the pandemic develops
• ensure fair treatment for consumers and small firms - making sure that firms give strong and clear support to customers, recognising challenges that everyone is facing
• keep markets working well – ensuring that markets remain orderly
• mitigate firm failures – mitigating the impact on consumers where firms fail in these challenging circumstances

The Financial Conduct Authority is also likely to concentrate on the restructuring of all its operations. This involves changing the whole structure and processes, starting with the data being gathered, how that data gets analysed, and is being handled as well as the communicates information around the enterprise, and also determining which of the organisations and individuals should operate during this period of the pandemic. The FCA is also planning to watch the way companies are being monitored, and how from the regulated industries the unacceptable companies and people are barred and eliminated, as quickly as possible. The FCA also plans to build capacity by investing in skills, systems, resources, and technology to achieve these results. The FCA will review its plans as the coronavirus effects become clearer and they plan to update corporations and individuals as and when any changes to the above-mentioned plans take place.

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