The FCA’s annual business plan is a closely watched indicator of what we can expect from the regulator in the coming year. The recently published Business Plan for 2021/22 indicates the FCA’s focus on continued transformation and greater accountability as a regulator. It also sets out key priorities for the FCA for  the coming years across a mix of familiar focus areas and more nascent emerging themes.


The FCA acknowledged its need for transformation, with forces such as the pandemic, Brexit, the digitalisation of financial services and the transition to a net-zero economy changing the financial services landscape. Given some of the criticism the FCA has endured recently, continued emphasis on that transformation agenda is not surprising. To become a more proactive regulator, the FCA has said it will focus on becoming:

  1. More innovative – taking advantage of data and technology to act decisively in the interests of consumers. This data-driven approach is supported by significant investment, with over £120m being spent to deliver the FCA’s Data Strategy.
  2. More assertive – testing the limits of its powers and engaging with partners to bring their powers to bear. Firms should be prepared for the greater scrutiny that will likely ensue; Nikhil Rathi, CEO of the FCA, reinforced this assertiveness by making it “clear that there is no scenario in which we will return to a light-touch, don’t-ask-don’t tell philosophy“.
  3. More adaptive – by constantly adjusting as consumer choices, markets, services and products evolve.

The FCA has been talking about becoming more data-driven for some years now – its first data strategy was published in 2013. Data remains a significant challenge for regulators, as it is for regulated firms and the markets, and the FCA’s innovation agenda is perhaps an ongoing journey than a destination.  Adaptiveness is a related theme, with the FCA recognising the need for it to remain current and in tune with the constant evolution in the financial services arena, something it has arguably struggled with in the past. As for assertiveness, the question is really what is meant by this – some observers would say that rather than being more assertive in general, the FCA needs to judge better when to be assertive and when ill-judged intervention can do more harm than good.


To support its aims for transformation, the FCA has for the first time set out overarching outcomes and metrics to provide a basis for greater accountability. First reporting in April 2022, these will include:

  1. Setting the bar high to support sustainable innovation for consumers: through publishing the aggregate amount by which its policy work benefits consumers.
  2. Setting the bar high to support market integrity in wholesale markets: by monitoring expected improvements in its suite of market cleanliness statistics.
  3. Ensuring firms start with high standards and maintain them: through monitoring its refusal/withdrawal/rejection rates and complaints about newly authorised firms.
  4. Using new approaches to find issues and harm faster: through monitoring the value and volume of FSCS claims, which it aims to reduce to bring down the FSCS levy on the industry.
  5. Tackling misconduct to maintain trust and integrity: the expectation is for an initial increase in the number of firms whose permissions are removed either permanently or temporarily due to the FCA’s increased capability to detect signs of misconduct and act faster.
  6. Enabling consumers to make informed financial decisions: as a result of increased communication with consumers, the FCA expects a reduced number and proportion of calls that need to be directed elsewhere and increased use of its ScamSmart website.
  7. Diversity and inclusion across the industry: the FCA will set targets for itself and drive stronger outcomes across the industry.

These metrics will be keenly watched when they are first published next year. It is hoped they will be a genuine means for the FCA to hold itself to account, and not an exercise in self-justification. It will be particularly interesting to see if the metrics around refusal and withdrawal of permissions evidence a tougher approach, and reflect the appearance that a significant proportion of the FCA’s enforcement case load seems to relate to firms that arguably should not have been given permissions in the first place, or should have had permissions withdrawn much sooner, before consumer harm arose.


 The FCA’s forward-looking priorities can be divided into three areas: consumers, wholesale markets, and cross-market. Some of the key stated aims and initiatives in these areas are:


The FCA recognises that consumers’ finances and behaviours have changed due to continued low interest rates and financial difficulties from the pandemic. The FCA wants to reduce the risks of unsuitable advice and risky investments by:

Enabling consumers to make effective financial decisions – through initiatives such as publishing the 3-year Consumer Investments Strategy and increasing public awareness and confidence through the ScamSmart campaign.

Ensuring consumer credit markets work well – by reviewing its own approach to debt advice rules and consulting on new rules to bring the Buy Now Pay Later sector under its supervision.

Making payments safe and accessible – by working with the Treasury to develop policy on payments, e-money and cryptoassets, as well as supervising bank branch closures closely.

Delivering fair value in a digital age – by investigating ‘sludge practices’, which make cancelling products or services online difficult for consumers.

Consulting on proposals for a Consumer Duty – that will set higher standards for firms’ culture and conduct.

  1. Wholesale Markets

The FCA acknowledges the importance of wholesale markets to the economy and will continue to focus on market integrity to engender trust and participation.

LIBOR transition – the FCA plans to support an orderly transition away from LIBOR by consulting on how it will use its new powers under the Financial Services Act and working with both the Prudential Regulations Authority and Bank of England to monitor firms’ transition plans.

Market abuse and financial crime – the FCA wants firms to be effective in reducing the risks of financial crime and preventing market abuse. The FCA will continue to monitor transactions in financial instruments reported to it, assess Suspicious Transaction and Order Reports and follow up intelligence from whistleblowers.

Asset management and non-bank finance – the FCA wants firms to offer appropriate and fair value products to investors. The FCA will increase its focus on whether asset managers present fairly and clearly the ESG properties of funds and identify outliers.

  1. Cross-market

The FCA also outlined its plans to address wider issues on a cross-market basis, with a focus on:

Fraud strategy – to drive down the incidence and impact of fraud, the FCA intends to conduct proactive surveillance and monitoring and work collectively with anti-fraud partners.

Financial resilience and resolution – to help ensure that firms fail in an orderly manner to reduce the harm caused, the FCA aims to strengthen its data-driven monitoring of the resilience of solo-regulated firms and target interventions at firms that are likely to cause material harm if they fail.

Operational resilience – the FCA published its final operational resilience policy statement in March, which it expects firms to implement so they can better prevent, adapt and respond to operational disruptions.

Some of these priorities are long-running areas of FCA focus, such as financial crime, fraud prevention, and ensuring orderly financial markets. Others reflect more recently emerging themes such as the consumer duty and the increasing focus on consumer investors and the threats posed to them by financial innovation. Many of the FCA’s aspirations are laudable, but as ever the question will be how they translate into transformation in the way the FCA operates.