This week’s review includes updates on financial regulation advice, fines for TSB and loan prices for cars and personal insurance, plus other developments at the FCA.
Enforcement
The FCA has fined TSB Bank plc (TSB) £10,910,500 ($14,235,574) “for failing to ensure customers who were in arrears were treated fairly,” according to a press release by the UK regulator.
The press release also says TSB “lacked suitable systems and controls to secure fair outcomes.” According to the regulator, the bank has “paid £99.9m ($130.34m) in redress to the 232,849 mortgage, overdraft, credit card and loan customers affected.”
The FCA has said “TSB has worked closely with the independent reviewer and the FCA and has concluded a comprehensive programme to resolve these issues, costing £105m ($137m).”
Media and speeches
Nikhil Rathi, FCA Chief Executive, delivered a speech at the City Dinner, Mansion House on Thursday 17 October. The speech came towards the end of a week which saw the regulator being criticised by the government in its approach to economic growth.
Key points of Rathi’s speech included:
- Growth is urgent but it has always been part of the FCA’s story.
- We are seeking answers about what more we can do to support capital formation, productivity gains and financial services exports.
- The secondary growth objective is liberating and we are having a much needed, more candid conversation about our collective risk appetite.
- We need to collaborate to deliver growth.
Nick Hulme, head of department, advisers, wealth and pensions, consumer investments, delivered a speech at the Consumer Duty Alliance – Future Strategy for Personal Finance Professionals event in Birmingham on October 11 2024.
Key highlights of his speech included:
- We continue to focus on good client outcomes, taking a less prescriptive and, through the Consumer Duty, more outcomes-based approach to regulation.
- We want to give firms (from sole traders right up to the networks and nationals) the flexibility to innovate in service of their clients that fits their size and client base more easily.
- The strategy has three buckets – reduce and prevent serious harm, test and monitor under the Consumer Duty, and the Advice Guidance Boundary Review.
Separately, but on the same subject, Hulme has also written a blog for the FCA titled A new approach to financial regulation advice.
Once again he has argued that, “In the constantly shifting world of financial advice, embracing difference isn’t just important – it’s crucial for future success.”
And Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, delivered a speech at the regulator’s 10th anniversary event on Thursday 17 October.
Highlights of her speech included:
- We’re launching an AI Lab. The AI Lab adds a new AI-specific focus to our Innovation services.
- Ten years ago, we became the first financial regulator in the world to launch a regulatory sandbox. We are celebrating our impact as well as the UK’s leading global position in fintech and innovation in financial services.
- Since then, we have supported almost 1,000 firms and over 95 other regulators have introduced a sandbox model.
Consultation
David Stallibrass, the FCA’s Deputy chief economist and head of department of economics, wrote an article on Thursday 17 October titled, Improving our understanding of how financial services regulation affects economic growth.
He argued that the FCA had always been ‘pro-growth’, and called on the government and other agencies to work together to achieve key objectives.
Elsewhere, the FCA has said it is looking into concerns about the rising prices of loans for car and home insurances, “alongside the launch of the Government motor insurance taskforce.”
A press release by the regulator says the review, known as a competition market study, will aim “to see whether people who borrow to pay for motor and home insurance are receiving fair, competitive deals.”
According to the press release, “the FCA will analyse the causes of increased costs in motor insurance and will look closely at claims costs, reviewing claims handling arrangements and factors impacting different types of claim.”
Separately, the FCA has responded to and welcomed a “market review on delivering finance for global decarbonisation and UK growth.”
The regulator has said in a statement: “This is an important area and we’re encouraged to see a significant number of firms across the economy start to set out plans for how they will decarbonise.”
The FCA has also announced a five-points agenda to achieve its objective of supporting the market to scale with integrity, with the right standards and guardrails to help build trust.
And finally, the FCA has welcomed the government’s consultation on the regulation of currently-exempt buy-now-pay-later (BNPL) products.
A statement from the regulator has said: “BNPL can provide benefits for consumers by giving them more payment options and support merchants in selling their goods and services. But as with other credit products, there are also risks and the potential for harm.”
