Number of firms that fail to meet the minimum standards is growing
The Financial Conduct Authority (FCA) has reported that, in the past year alone, it has stopped the operations of 627 firms that failed to meet the minimum standards set for the financial services sector.
The number of firms shut down by the regulator was up 30% from the previous year, as the FCA sought to further enforce high standards in the sector during the first year of its three-year strategy.
Nikhil Rathi (pictured), chief executive of the Financial Conduct Authority, added that the FCA had evolved into a more proactive, assertive, and data-led regulator, better equipped to face challenges like the rising cost-of-living in a more agile and effective way.
“Tailored support is important for those struggling with debt, and we continue to work with firms to make sure people receive the right help to manage their finances, especially with the rising cost-of-living,” he said.
Reporting on its performance during the past year, the FCA said it had helped many people who felt pressure from the rising cost-of-living by acting quickly to set out how lenders should provide tailored support to struggling borrowers, warning insurers to protect their customers from unnecessary add-ons or unfair penalties, and securing up to £47 million in redress for borrowers in financial difficulty for the way their lenders treated them.
Aside from working to protect consumers from harm, the regulator said it continued to support competition across the sector and the proposed reforms to listing will remove barriers to entry for companies tapping the market for capital.
Learn about our progress and key achievements in the first year of our 3-year strategy. #FinancialServices #ConsumerDuty https://t.co/0HIEV7Ip3v pic.twitter.com/iOUNg7vZa0
— Financial Conduct Authority (@TheFCA) July 20, 2023
The FCA also estimates that for every pound spent on its operations last year, firms and individuals benefitted by £17 through its action.
“Maintaining high standards is key to supporting growth,” Ashley Alder, chair of the Financial Conduct Authority, stated in the regulator’s annual report. “We are helping firms test their innovative products, guiding firms through the authorisation process, and are supporting a range of supply and demand-side market reforms.
“On July 31, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.”
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