UK financial regulator the FCA has announced the launch of a new five-year strategy “to deepen trust, rebalance risk, support growth and improve lives.”

The strategy is aimed at changing the way the regulator works and supervises the UK’s financial system and market, in order to be more efficient and aligned with the government’s broader agenda.

In a press release, the FCA has said the new strategy will focus on four priorities, which include:

• Be a smarter regulator; predictable, purposeful and proportionate. The FCA will improve its processes and embrace technology to become more efficient and effective.
• Support sustained economic growth, by enabling investment, innovation and ensuring the continued competitiveness of the UK’s world-leading financial services.
• Help consumers navigate their financial lives by working with industry to boost trust, product innovation and ensuring the right information and support is available for people to take financial decisions.
• Fight financial crime, focusing on those who seek to use the fact they are regulated to do harm. It will go further to disrupt criminals and support firms to be an effective line of defence.

The announcement comes after months of pressure as well as criticism from the government, with senior officials claiming the watchdog was holding back economic growth due to excessive regulation and bureaucracy.

Many of the country’s financial regulators have been in retreat in recent months. Some, like the Payment Systems Regulator (PSR) have been scrapped, whilst others have given up on controversial plans after a prolonged onslaught from the government and business leaders.

Last month, senior ministers hinted that the government was discussing behind-the-scenes plans to reshape the entire UK regulatory landscape, and align it with the government’s priorities.

Shift in attitude

The new strategy will lead to scraping “more than 100 pages of regulations covering consumer finance, investments and mortgage lending,” the Financial Times has reported. It is an indication of how the UK’s top regulator is shifting its attitude from protectionism to a more risk-friendly approach in terms of regulating the system and markets.

Ashley Alder, Chair of the FCA, said: “Too often the focus has been on the risks of a decision taken rather than the lost opportunity of taking none. We want to change that so we can spur growth and improve lives.”

Nikhil Rathi, Chief Executive of the FCA, says the new four priorities reinforce each other and will help the regulator “become more efficient and effective and make the choices that shape the financial system.”

A key shift in the new strategy is the introduction of a less stringent supervision for companies “seeking to do the right thing,” the regulator has said in a statement.

The FCA will also look into the possibility of “whether it can stop requiring certain data returns,” another key issue that has annoyed businesses in the City.

It’s worth noting that the regulator was already well into its current three-year strategy, which included making changes to the listing regime, introducing the Consumer Duty, faster authorization for firms that meet requirements, and keeping potentially harmful firms out of the financial system.