There has just been a slew of new FCA portfolio letters setting out the strategy for 2025.
- Consumer Duty as a Core Focus: Across all sectors, the Consumer Duty is central, requiring firms to deliver outcomes that are beneficial for retail customers. Boards and senior management are expected to embed customer-centric practices deeply into company cultures and operations.
- Supporting Financially Vulnerable Customers: With economic pressures continuing, firms are expected to support customers facing financial difficulties through tailored, fair, and informed support systems, ensuring access to advice and practical, sustainable solutions.
- Prioritising Financial Resilience: Firms must ensure their business models and financial resources are resilient to economic shocks, focusing on stress testing, contingency planning, and clear communications to safeguard both customer outcomes and market stability.
- Operational Resilience Amidst Technological Change: As firms digitise, modernise, and adapt to new financial technologies, there is an emphasis on managing operational risks, with strong internal controls, oversight, and an ongoing focus on customer service continuity.
- Adaptability to Evolving Market Conditions: Each sector is encouraged to adapt strategically, staying agile to respond to competitive and regulatory changes. The FCA acknowledges the value in business model innovation, provided it continues to meet regulatory standards and consumer expectations.
- Addressing Financial Crime and Fraud: Combatting financial crime remains a priority, with firms expected to implement robust, technology-assisted controls to prevent fraud and safeguard the financial system from misuse, even if inherent risks are sector-specific.
- Sustainable Finance and Green Claims: Firms are encouraged to contribute to sustainable finance goals, with clear and transparent claims about any environmental benefits in products or services, in compliance with the FCA’s anti-greenwashing rules.
- Enhanced Governance and Culture: Strong governance structures and healthy, ethical organisational cultures are critical. The FCA’s focus extends to non-financial misconduct, with firms expected to address issues like discrimination and harassment to foster inclusivity and integrity.
- Ensuring Fair Value for Customers: Firms are urged to continually assess the value offered by their products and services, aiming for fairness and transparency, particularly in relation to older or vulnerable customers with potentially outdated or misaligned financial products.
- Engagement and Transparency with Regulators: The FCA expects firms to maintain open and honest communication, especially regarding significant changes in operations or product offerings. Transparency is vital to foster a cooperative regulatory environment and ensure compliance with Principle 11.
Retail Banking: Summary [FCA Letter]
Building Societies: Summary [FCA Letter]
Lifetime Mortgage Providers: Summary FCA Letter
Non-Bank Mortgage Lenders: Summary [FCA Letter]
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