Latest news from the FCA

Happy New Year!
I often wondered at what point in January we should stop saying this - but the potential for 2019 is still fresh and the positive ambition continually demonstrated across the Fintech community in Scotland continues to be remarkable and worth all good wishes!
The end of 2018 was jammed packed and not just with festivities! The FCA published a number of documents just before Christmas that are worth drawing attention to and may be relevant to many of the firms in the FinTech Scotland community. The types of work below include: an analysis of a sector, a consultation paper and a speech. It highlights the variety of tools and approaches the FCA use to understand what's happening in the market, to share its view and to set out its expectations.

Analysis of a Sector

The Strategic Review of Retail Banking Business Models will be of interest to many businesses (perhaps not the snappiest of titles - but an enlightening read). Retail Banks and Payments firms will have a natural interest, in addition anyone considering business model development associated with Open Banking changes may find the report a useful read and more specifically anyone developing a business model focused on SME banking may find the report useful.
The work is one of the FCA's business plan commitments for both 2017 and 2018. The purpose of the review was to understand the impact of accelerating change (from regulatory changes and technological developments) on retail banking business models and the potential implications for consumers.
I think the findings are thought provoking - chapter 4 in particular provides food for thought. In its conclusions the FCA sets out areas for further work. It also notes topics where work in collaboration with other regulators and interested groups may be of interest to the consumer - specifically access to banking services, systems resilience and appropriate use of consumer data.
The FCA are interested in feedback and industry engagement on this work. Feedback can be given using by 15th of February.

Consultation Paper

Overdrafts consultation paper - High Cost Credit Review sets out a raft of proposals to reform charges related to overdrafts. The proposals aim to address a number of issues that are considered as drivers of harm to consumers. These include complexity of overdraft pricing, high levels fees and repeat use.
This paper will be of interest to firms currently offering overdrafts. There are also parts of the paper relevant to some payments providers (depending on the business offering) and businesses offering products that have a similar function as an overdraft. Consultation closes  on 18 March 2019. 


To finish this update I thought it may be of interest to share this  Speech - Diversity and Inclusion. Speeches such as this are helpful for the FCA to share its expectations and are useful for all firms to see, especially those that are newly authorised or firms that don't have much day to day engagement with the FCA.
Beyond the important topic of Diversity and Inclusion (D&I), this speech also confirms the FCA's continued focus on Culture as part of its supervisory approach and it's relevance for all authorised and regulated firms regardless of size. Culture can be a subject that's difficult to judge or assess. In this speech Chris Woolard links the importance of D&I in understanding culture and he affirms the FCA's view on the importance of fair treatment of consumers and in particular vulnerable customers. He talks about the role of senior management within firms and shares some insights from the whistleblowing disclosures the FCA received. He sets out that authorised firms can expect the FCA to talk to them about D&I practices and vulnerable consumer policies, amongst other things!
Finally, as a reminder we're running two FCA events in January. The first is on 16th and is focused on building an understanding of the FCA. Its aimed at firms new to authorisation or those thinking about becoming authorised. The second is on 31st and is being lead by the FCA's project innovate team.
I look forward to seeing you then.
All the best