Charles Randell, Chair of FCA and PSR, has given a speech to the Building Societies Association outlining FCA’s continued shift towards ‘outcomes focused’ regulation.
The speech traces the origins of FCA’s plans to shift to an ‘outcomes focused’ model of financial regulation back to its days as the FSA. It notes how difficult it is to shift the emphasis of regulation and how easy it is to revert back to measuring ‘inputs’ (such as by assessing the quality of firms policies and procedures) rather than examining the outcomes experienced by consumers.
The speech identifies the high-cost credit and active fund management industries as recent examples of the ways in which a focus on outcomes has had measurable benefits for consumers.
However, FCA recognises that significant progress still remains to be made, starting with the culture and governance of FCA itself. To this end FCA has identified the following changes it will implement:
- embedding an outcomes focused approach at Board and Executive level;
- continuing to be transparent and publish information demonstrating the impact of any regulatory intervention;
- improving FCA’s identification of gaps in its data gathering and working to remedy these;
- making sure that FCA clearly publicises the outcomes it is seeking, even where the pursuit of these is affected by influences beyond FCA’s direct control; and
- ensuring that ‘outcomes’ are at the heart of FCA’s plans from the outset.