Fair value
Central to this aspect of the FCA’s strategy is the emphasis on firms offering products that deliver value for money. The regulator expects to see firms critically evaluating their value propositions from the consumer’s perspective, to ensure a holistic consideration of fair value. In September last year, the FCA made it clear that it would act where it identifies that firms’ products and services are clear poor value outliers. The strategy indicates that such scrutiny may be particularly focused on the pensions and insurance sectors, with a specific emphasis on pure protection products.
Consumer support and the Consumer Duty
The FCA has also highlighted consumer support as a key area of interest. Firms will need to strike the right balance between providing consumers with enough information to make informed decisions for their financial futures, without overwhelming consumers (particularly investors) with excessive disclosures.
Perhaps unsurprisingly, this priority is underpinned by the Consumer Duty. By 2030, the FCA wants to report an increase in customer satisfaction with their financial services providers, having repeatedly indicated that it will take action where firms fall short of their obligations under the Duty. While there has been no public enforcement of the Duty yet, the FCA took action in 2024 against two firms for failings relating to their treatment of vulnerable customers and customers in financial difficulty. The conduct in these cases pre-dated the introduction of the Duty but in both cases the FCA found that the firms had failed to deliver good outcomes for retail customers. The way in which the customer support issues were identified, escalated and remediated in these cases was a significant consideration for the regulator in determining the appropriate action to take.
Financial inclusion and innovation
The treatment of vulnerable customers remains a critical focus, with the FCA in this strategy emphasising the importance of financial inclusion. The FCA wants to facilitate innovation that broadens access to financial services and products and makes consumers more resilient to financial shocks (particularly in products it considers crucial for consumers, such as pensions, day-to-day accounts and savings accounts). The strategy indicates that the FCA will review some of its rules to better enable innovation, including a reassessment of tolerable risk for consumers (such as reconsidering the rules around mortgage affordability requirements).
“Smart” data
The use of data is a key part of the FCA’s drive for innovation. The FCA expects that data-sharing will increase consumer choice, reduce costs, and support new market entrants. It wants to see firms embracing opportunities for data-sharing to deliver better outcomes for consumers. For example, increased choice for consumers when making payments, wider access to credit for consumers and small businesses and better access to personalised support for consumers. A prime example of the FCA’s drive for innovation is the progression from Open Banking to Open Finance, with the FCA committed to collaborating with firms to realise the potential benefits of both for consumers.
This is the last post in our series examining the FCA’s strategy for 2025-2030.
