How to navigate the FCA's new business plan for 2023/24

The Financial Conduct Authority (FCA) has published its business plan for 2023/24, outlining its priorities and activities for the next 12 months. The plan is aligned with the FCA's three-year strategy, which sets out its vision and ambitions for the future of financial services regulation.

The FCA's business plan is an important document for fintech firms, as it provides insights into the regulator's expectations, areas of focus and potential interventions. Fintech firms need to understand the FCA's objectives and outcomes, and how they can contribute to them, in order to operate effectively and compliantly in the UK market.

In this blog post, we will summarise the key points of the FCA's business plan, and provide some practical tips for fintech firms on how to navigate the regulatory landscape and achieve their goals.

The FCA's business plan: what are the main themes?

The FCA's business plan is structured around three areas: reducing and preventing serious harm, setting and testing higher standards, and promoting competition and positive change. These areas reflect the FCA's commitments from its strategy, which are based on four consistent overarching outcomes for consumers and wholesale markets:

- Consumers can make informed choices about products and services that meet their needs

- Consumers are protected from harm caused by firms or individuals who exploit them or act dishonestly

- Markets function well, with high standards of conduct and governance

- Markets support innovation and positive change that benefits consumers and society

Under each area, the FCA identifies specific priorities and activities that it will undertake in 2023/24. Some of these are cross-cutting themes that apply to all sectors and markets, while others are more focused on particular issues or segments.

Some of the key themes that fintech firms should pay attention to are:

- Preparing financial services for the future: The FCA will work with the Treasury to implement the new regulatory framework that was announced in November 2022, which aims to make regulation more agile, proportionate and outcomes-focused. The FCA will also continue to support innovation through initiatives such as the Regulatory Sandbox, the Digital Sandbox and TechSprints.

- Putting consumers' needs first: The FCA will improve consumer protection and standards for all consumers, and ensure that its support for struggling consumers remains a priority. The FCA will also enhance its consumer engagement and education activities, and use behavioural insights and data analytics to understand consumer behaviour and preferences.

- Reducing and preventing financial crime: The FCA will prioritise tackling fraud, money laundering, market abuse and other forms of financial crime, which pose significant risks to consumers and market integrity. The FCA will also strengthen its supervision and enforcement capabilities, and collaborate with other agencies and stakeholders to improve intelligence sharing and coordination.

- Strengthening the position in global wholesale markets: The FCA will help ensure that the UK remains one of the leading global markets of choice, by maintaining high standards of conduct and governance, promoting fair and orderly markets, and supporting market resilience and innovation. The FCA will also engage with international counterparts and bodies to influence global standards and address cross-border challenges.

How can fintech firms navigate the FCA's business plan?

The FCA's business plan provides a clear direction for fintech firms on what they need to do to comply with the regulator's expectations, as well as what opportunities they can seize to grow their business and deliver value to their customers.

Here are some practical tips for fintech firms on how to navigate the FCA's business plan:

- Align your strategy with the FCA's outcomes: The FCA expects fintech firms to adopt a culture of compliance that is aligned with its desired outcomes for consumers and markets. This means that fintech firms should design their products and services with customer needs in mind, ensure that they are fair, transparent and suitable, protect customers from harm, and contribute to market efficiency and innovation.

- Keep up to date with regulatory changes: The FCA will implement a number of regulatory changes in 2023/24, as part of its new framework and in response to emerging issues. These changes may affect fintech firms' operations, governance, reporting or authorisation requirements. Therefore, fintech firms should monitor the FCA's publications, consultations and guidance, and assess how they impact their business model and processes.

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