What's Happening?
The Financial Conduct Authority (FCA) has seen a decline in overall satisfaction among firms, dropping from 84% in 2023-24 to 74% in 2024-25. The FCA's Practitioner Panel survey revealed that fixed firms, which receive the highest level of supervisory attention, rated the perceived effectiveness of FCA regulation lower, falling from 84% to 67%. Flexible firms, subject to lighter supervision, maintained a satisfaction rating of 75%. The survey highlighted an increase in information requests from the FCA, with 47% of fixed firms and 31% of flexible firms finding these requests excessive. Fixed firms also reported difficulties in collating requested information, with 66% highlighting this issue.
Why It's Important?
The decline in satisfaction with the FCA is significant as it reflects growing concerns among firms about regulatory burdens and the effectiveness of FCA oversight. The increased information requests and perceived lack of clarity in communications may hinder firms' ability to comply efficiently, potentially impacting their operations and consumer outcomes. The drop in satisfaction could influence firms' perceptions of the UK's reputation as a financial center, affecting investment and business decisions.
What's Next?
The FCA may need to address these concerns by streamlining its information request processes and improving communication clarity. Engaging with firms to understand their challenges and adjusting regulatory approaches could help restore confidence and satisfaction. The FCA's ability to balance regulatory demands with industry needs will be crucial in maintaining its effectiveness and reputation.
Beyond the Headlines
The survey results highlight the broader challenge of regulatory compliance in the financial sector, emphasizing the need for proportionality in weighing costs against benefits. As firms navigate these challenges, the FCA's role in facilitating better consumer outcomes and enhancing the UK's financial reputation remains critical.
