This month, the UK’s Financial Conduct Authority (FCA) released its Business Plan for 2020/2021, setting out its objectives for the next three years. Its highest priority is to deal with the financial implications of the COVID-19 pandemic effectively; but the plan also highlights other threats to the smooth running of the financial markets, including financial crime and Brexit, which will create a new political, legal and economic environment for financial institutions.
The FCA regulates almost 60,000 financial services firms, including banks, pension providers, wealth managers and consumer credit firms. The FCA aims to ensure that the financial markets are honest, fair and effective at protecting consumers and the economy as a whole.
Despite the unprecedented times and significant challenges facing banks and other financial services entities, the FCA states, “We will not compromise on our expectations of firms, particularly that they make consumers’ interests the foundation of their business models and behave accordingly.”
The plan demonstrates a commitment to reducing financial crime. Where the FCA suspects poor practice, it will act “with all relevant force” and work with other law enforcement agencies to protect the economy through investigations and prosecutions.
A theme throughout the business plan is the need for financial institutions to operate under high standards of governance. There is an onus on organisations to have effective systems and controls in place to detect, disrupt and reduce the risk of financial crime. Those in the retail banking sector and dealing with crypto assets will be under particular scrutiny.
Financial institutions with operations in the UK should seek professional guidance to avoid falling foul of the high standards of the UK regulator.