Proposed 'strategic realignment' intended to spur economic expansion by the Financial Conduct Authority
The Financial Conduct Authority (FCA), the UK's financial regulatory body, has unveiled a new strategy aimed at boosting productivity, competition, and consumer outcomes. The strategy, which focuses on professional and public services, the United Kingdom, and various sectors of the financial industry, is a significant departure from the FCA's traditional risk-averse approach.
In a speech, Kate Collyer, the FCA's chief economist, outlined the regulator's changing approach to risk. Collyer emphasised that excessive caution can hinder progress and pointed to the series of reforms the FCA is undertaking to revolutionize the mortgage market, aimed at boosting mortgage affordability by widening access and boosting competition.
The FCA's new strategy involves a recalibration of its risk-based approach, shifting from risk aversion to risk calibration. This shift, according to financial services expert Jonathan Cavill of Pinsent Masons, is not deregulation but a strategic rebalancing. The goal is to support consumer well-being and market dynamism, while also promoting innovation in artificial intelligence (AI) and 'open finance'.
To achieve these objectives, the FCA is developing new initiatives like the Private Intermittent Securities and Capital Exchange System (PISCES), which aims to expand private market access and promote a tech-positive stance. The FCA also plans to empower investors to make their own risk decisions through capital market reform, including a significant overhaul of the listings regime.
The FCA's new approach is not a leap of faith, but a data-driven balance of trade-offs and outcomes, according to commentator Harrison. The regulator's approach to regulation is evidence-based, with ongoing evaluation and monitoring underpinning its shifting approach, and metrics being developed on a continuous basis to assess regulatory impact and systemic risk.
In September 2025, the FCA launched initiatives to expand access to the private capital market, including the creation of a Scale-up Unit to support fintech growth and address scaling barriers, alongside a Smart Data Accelerator to promote open finance and smart data projects focused initially on SME finance and mortgages.
Nikhil Rathi, the FCA's chief executive, has outlined a resolve to implement "outcomes-based" regulation to better support growth, innovation, and accountability across the financial services sector. Consumers and small businesses can now give access to their payment account data to third-party providers under strict conditions, as part of the FCA's efforts to promote innovation in 'open finance'.
The FCA's new strategy has been welcomed by industry experts as an indication of an ever-maturing regulatory model. The focus on metrics and monitoring, as well as the commitment to "smarter regulation" that balances opportunity with vigilance, is seen as a step towards a more dynamic and innovative financial services sector in the UK.
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