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 a decrease in perceived effectiveness of FCA regulation among fixed firms, which receive the highest level of supervisory attention. The survey also highlighted an increase in information requests from the FCA, with 47% of fixed firms and 31% of flexible firms reporting excessive requests. Fixed firms expressed difficulty in collating requested information and felt they were not given sufficient time to compile data.
Why It's Important?
The decline in satisfaction with the FCA's regulatory approach could impact the reputation of the UK as a financial center. Firms are expressing concerns over the burden of data requests and the perceived lack of proportionality in FCA actions. This dissatisfaction may affect the ability of firms to deliver better outcomes for consumers and could lead to increased scrutiny of the FCA's regulatory practices. The survey results indicate a need for the FCA to address communication and operational challenges to improve its relationship with regulated firms.
What's Next?
The FCA may need to reassess its approach to data requests and enhance its communication strategies to rebuild trust with firms. Addressing the concerns raised in the survey could lead to improved regulatory effectiveness and satisfaction among firms. The FCA's ability to adapt its practices in response to feedback will be crucial in maintaining its role as a leading regulatory body.
Beyond the Headlines
The survey results highlight the broader challenges faced by regulatory bodies in balancing oversight with operational efficiency. The FCA's efforts to enhance its regulatory framework for the next 20 to 30 years will require careful consideration of industry feedback and collaboration with stakeholders to ensure effective regulation that supports the growth and stability of the financial sector.
