PRA publishes 2026 supervisory plans

The PRA has published its supervisory priorities for 2026. Its main plans focus on streamlining supervision, so that periodic supervisory meetings and other activities will move to a two year cycle – an initiative the PRA had already started with smaller firms. Its other overarching priorities include:

• quicker action on application timelines – for senior manager applications, new authorisations and IRB model change pre-approvals;
• consulting in the summer on the new captive insurer regime; and
• progressing the Future Banking Data project to streamline and modernise reporting requirements.

For UK deposit takers, the PRA also highlights:

• looking at firms’ strategic risk management;
• wanting to see improvements in operational resilience testing, and for operational resilience to be an integral part of decision making;
• the continued need to manage financial resilience risks. The PRA will rebase variable Pillar 2 requirements in 2026; and
• the need for strong data governance and controls.

For insurers, it highlights:

• continued attention to the BPA market – with a particular concern that competitive pressures could incentivise weaker pricing discipline, and that firms use funded reinsurance wisely;
• the need for risk management practices to adapt to reflect changes in investment strategies;
• the importance of boards ensuring robust independent legal entity governance and conflicts management;
• that general insurers may be making overly optimistic underwriting assumptions – and a focus from the PRA on ensuring solvency capital requirements are not materially understated;
• for the London Market, the need to improve data quality and standards for carrying out exposure risk management and to consider the risks that increased delegated authority underwriting could bring;
• as with deposit takers, the need for better operational resilience testing and embedding of operational resilience into the underlying risk culture of firms;
• the upcoming deadline of June 2026 for in scope firms to prepare a Solvent Exit Analysis; and
• the need to use AI to innovate, but also to consider the novel risks it creates.

For international banks, and also for PRA regulated designated investment firms, it highlights:

• again, the need for strategic risk management to evolve with the firm’s business;
• a focus on counterparty credit risk, especially to NBFIs;
• prioritising model risk management;
• considering the risks and benefits of AI and digital asset initiatives; and
• similar expectations around operational and financial resilience, and data risk as those for UK deposit takers.