FCA Strategy 2025

March 2025

A new strategy for a changing environment

The FCA published its new five-year strategyopens in a new tab on 25 March 2025. Over the last few months, the government has increased its pressure on the FCA to change the status quo of ‘regulating for risk but not regulating for growth’. The FCA has evidently got the message and responded in its strategy with a strong focus on supporting growth, being a more ‘predictable, purposeful and proportionate’ regulator and continuing the debate around the collective attitude to risk. This focus is evident by a conscious move from ‘preventing consumer harm’ to ‘helping consumers navigate their financial lives’ –and the shift from a three to a five-year strategy to give more certainty. How this manifests itself, in reality, for firms and consumers will be critical.

Context

The strategy is published in the context of the government’s focus on growth. There have already been various requests to the FCA from the Prime Minister and Parliament on measures to support growth and government policy papers on regulation and growth. Later this year, the government will publish its FS Growth and Competitiveness strategy (with regulation likely to be one of the policy pillars) as well as the wider Industrial Strategy.

Impact on firms

The strategy sets the overall direction of the FCA and its focus. However, it does not give details on the specifics of its work programme. The FCA says it will continue to reform how it regulates including taking a more flexible approach with less intensive supervision for those firms ‘demonstrably seeking to do the right thing’. But it also wants regulated firms to have more direct contact and access to the FCA.

The priorities

A smarter regulator – more efficient and effective

The FCA states that, where possible, it will rely on existing standards, focusing on outcomes rather than imposing prescriptive new rules. It will constantly review the information it requests from firms, and it has already identified three regular data returns it plans to stop.
Supporting growth

Alongside becoming a more effective and predictable regulator, the FCA will seek to reduce the regulatory burden, to allow firms to focus on activities that will support economic growth. The FCA will continue its work on strengthening the UK capital markets by simplifying disclosure requirements and widening retail access. It will help deliver the National Payments Vision, including integrating the PSR into the FCA. It will continue to support and build out Open Banking and publish a roadmap for the rollout of Open Finance. Redundant regulatory requirements will be stripped out for sectors like commercial insurance and asset management.
Helping consumers navigate their financial lives

The FCA will aim to deliver this objective by (i) increasing trust, (ii) allowing for product innovation and widened access and (iii) aiding people to get the support they need. Whilst these are new, they will be delivered via existing regulatory developments. This includes targeted support, mortgage affordability, a value for money framework in workplace pensions, encouraging schemes to invest for longer term returns and delivering the pure protection market study.
Fighting financial crime

The FCA will remain focused on its role in disrupting financial crime - working with both firms and other partners. The FCA’s resources will be dedicated to both those applying to be regulated as well those that already are. Alongside this work, FCA will also aim to improve the tools that consumers have to help them protect themselves. This more holistic approach is seeking to address tacking financial crime from both perspectives.

What's actually new

Much of the ‘new’ strategy reflects activity and approaches already announced and/or inflight. However, the paper does detail new initiatives too. The FCA will;

operate less intensive supervision for firms demonstrably seeking to do the right thing.
have a smaller number of priorities (aligned to the strategy) to have more meaningful impact.
publish a handful of annual market reports summarising the key market risks (and opportunities).
embrace more technology to act faster and more assertively where the harm is greatest.
support the government’s financial inclusion strategy by addressing low financial capability.
continue to support international standards but, in an era of heightened geopolitical instability, it may choose ‘to make progress on some issues with a smaller group of like-minded jurisdictions’.
formally establish a permanent presence in US and Asia-Pacific to support international regulatory relationships.