FCA outlines regulatory priorities for retail banking

The FCA has published its regulatory priorities for the retail banking sector.

The report notes that retail banking is changing significantly, with consumers using branches less and ever-diversifying digital channels more. Accordingly, the regulator’s priorities and expectations on firms for the next 12 months are as follows:

Access to cash and essential banking services

The FCA expects firms to:

• Fill significant gaps in local cash access services in accordance with the FCA’s Access to Cash sourcebook (where a firm is designated under the regime);
• Avoid causing foreseeable harm to retail customers when implementing digital
  first transformations, including by analysing customer need and making sure any
  proposed alternatives are in place and accessible before a branch closure;
• Comply with the Basic Bank Account regulations (where the firm is designated), making it easy for eligible consumers to apply; and
• Ensure financial crime controls don’t lead to unnecessary or overlong account
  freezing.

The FCA will be monitoring designated firms’ Access to Cash compliance and solutions for plugging gaps in cash access, assessing branch closure notifications, researching the harms that reduced in-person banking services may create. It will also be finalising its ‘mystery shopping’ on how firms are providing basic bank accounts, with feedback due Q2 2026.

Good outcomes from products and services

For retail customers, under the Consumer Duty firms should:

• Keep improving their data and management information dashboards for monitoring
  and assessing consumer outcomes;
• Take action where necessary to support consumers in pursuing financial objectives and to avoid causing them foreseeable harm, including for those in vulnerable circumstances, financial difficulties, or where fair value isn’t being provided; and
• Keep consumer outcomes front and centre when designing and delivering products or services – especially where these are new, innovative or AI-based.

This year, the FCA will continue to monitor data and consumer outcomes, undertake risk-led reviews on high-impact topics and support cross-sector work on: customer journeys; the products and services and consumer understanding outcomes; and firms’ approaches to outcomes monitoring.

Fighting fraud and other financial crime

The FCA expects firms to:

• Help consumers understand fraud risks and support victims fairly;
• Monitor and mitigate the risks firms and consumers face, refining defences and
  control frameworks and promptly and effectively remediating any weaknesses;
• Keep improving systems and controls, to combat bad actors’ evolving tactics and
  technologies; and
• Learn from FCA outputs and keep investing in resources and controls, including
  advanced technology such as AI where appropriate.

In this area, the FCA will engage with firms progressing system and control improvement programmes, use data to identify outliers, continuing reviewing money laundering controls around cash deposits, and assess selected firms on specific risks and controls.

An independent evaluation of the PSR’s APP fraud policies is set to conclude in Q3 2026.

Operational resilience and data security

Finally, the FCA expects firms to continue building operational resilience and data security by:

• Identifying emerging risks to resilience, incorporating these in scenarios and testing
  to refine action plans for remediating vulnerabilities and remaining within impact
  tolerances;
• Continuing to evolve and improve cyber protection and information protection
  strategies, with tested recovery plans to mitigate harms from cyberattacks and third
  party failures;
• Managing any live issues within impact tolerances, managing the impact on customers and communicating effectively with them; and
• Participating in cross-industry initiatives where appropriate, to help improve system-wide resilience and recovery strategies.

Alongside the PRA and other stakeholders, the FCA will engage with firms about their technology change programmes, collect information on insider risk management, and introduce new rules for reporting operational incidents and information on material third parties.

Other areas of focus

Beyond its four priority areas above, the FCA will also focus on:

• Business banking outcomes;
• Innovations in retail banking (including open banking, open finance, stablecoins and tokenised deposits);
• The motor finance commission review; and
• SMCR reforms.

MPs are also set to hold a debate on accessibility of banking services on 19 March 2026.