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As 2013 comes to close, we will remember it for many things. From a regulatory point of view, however, it is the year which saw the back of the Financial Services Authority (FSA) and the birth of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Our report – “Changing face of regulation” – looks back at firms’ hopes and fears in the run up to legal cutover and their view now that the FCA has found its feet.
So, what is the industry’s view about how the regulator is treating firms? In the full report we see what the FCA is doing well, what less well and firms’ challenges in the new regime.
Glad tidings
Over half of industry stakeholders agree that the FCA’s forward looking and preventative approach to mis-selling is more successful than the FSA’s approach, with the caveat that it is still “too early to tell” fully.
Refreshingly, firms praised the FCA giving many examples of good work it has done so far to achieve good outcomes for customers. The feeling amongst firms is that the FCA’s higher media profile, constant communications and proactive stance is focussing the minds of senior management and leading to better MI and risk engagement. The demands for evidence are challenging, but worth it, given the improvements they drive.
Room for improvement
Despite these positives, only 15% of respondents believe the new system of regulation is increasing public trust in the industry. 61% is unsure whether the FCA will have an impact on public trust.
Given the FCA’s ongoing staffing challenges in quality and retention the industry remains unconvinced by FCA human resource improvements: 47% of respondents feel there has been no change in the quality of staff between the FCA and the FSA. The relative confidence in the regulator’s impact on mis-selling, does not extend to its impact on better outcomes for customers: 58% of respondents are unsure or do not believe the FCA’s approach is resulting in those better outcomes.
FCA’s resolutions 2014?
The industry welcomes the FCA’s increased engagement through consultation, workshops and thematic reviews. So what can the FCA do to support firms even more in their compliance? Firms want more engagement still, making practical suggestions to the regulator. Firms ask to be listened to more and that events between industry and FCA are recorded and made accessible online to a broader audience. More generally, firms still want more clarity, less intrusion and a more level playing field moving into 2014.