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FCA Celebrates Biggest 2023 Achievements
The FCA has now reached the second year of its 3-year strategy and has recently shared its notable accomplishments and milestones from the past 12 months. These include the implementation of the Consumer Duty, which is already having a “game-changing” impact on the industry.
The regulator’s Chief Executive, Nikhil Rathi, has said:
“The financial services sector is vital to the UK economy, and we are committed to supporting its role in long-term economic growth.
“At the same time, our commitment to reducing and preventing harm remains unwavering, and the introduction of the Consumer Duty reaffirms this.
“From the digital frontiers where new opportunities and risks are fast emerging, to the competitiveness of UK markets, we are focused on staying ahead and have laid out proposals for far-reaching reforms across our remit.
“We know at the FCA our role is not just about regulating financial services, it's about safeguarding futures, supporting innovation and informed risk-taking and maintaining a resilient financial ecosystem.”
Let’s take a look at some of the highlights and how they have affected the industry, particularly within the insurance market:
Reducing Consumer Harm
The implementation of the Consumer Duty in July 2023 marked a major shift for both firms and consumers, setting higher and clearer standards of consumer protection across financial services and requiring firms to prioritise their customers’ needs. Firms have already changed their savings rates and fees as a result.
The FCA also took action against insurers providing Guaranteed Asset Protection (GAP) insurance after finding that these products were providing poor value to customers. Firms received an ultimatum to either take immediate action to prove customers were getting a fair deal or face further action under the Consumer Duty.
The FCA continues to monitor how firms are implementing new rules on insurance pricing and will hold firms, including senior managers and boards, accountable for the delivery of good consumer outcomes.
Tackling online harms
In September 2023, the FCA introduced additional screening checks for firms approving marketing for unregulated firms and new financial promotions rules for crypto assets followed in October. These measures are designed to help people make informed decisions about when pursuing financial objectives.
Following the increase in ‘finfluencers’ promoting financial products to consumers on social media, in July the FCA launched a consultation on new guidance for firms to ensure that financial promotions made online are fair, clear, and not misleading.
As of December 2023, the FCA has removed over 10,000 potentially misleading adverts and sent out 2,243 warnings about unauthorised firms and individuals.
Between January and October 2023, the FCA cancelled 1,266 firms that failed to meet its minimum standards for authorisation. Following enforcement investigations, the regulator imposed fines totalling £52,802,900 this year.
Improvements to Accessibility
On 7 December 2023, the FCA set out its new rules to maintain access to cash in an increasingly digital world. The proposals set out how banks and building societies will need to assess and fill gaps in local cash provision, ensuring people can continue to access cash if they need it.
In September, the FCA and the Prudential Regulation Authority (PRA) announced a consultation on proposals to introduce a new regulatory framework on Diversity and Inclusion in the financial sector.
In October, the FCA published a discussion paper on AI to help assess the benefits and risks of AI to consumers and how it can best support its safe and responsible adoption.
These are just some of the key achievements made by the FCA in recent months, which indicate a huge step towards improving access to financial services for consumers over the next few years.