Last week, the FCA released its business plan for 2024-2025. In it, the FCA outlined their objectives for the next year, which largely align with last year’s goals. The focus remains on promoting economic growth, leveraging technology for consumer protection, and maintaining market integrity.

The plan acknowledges the various challenges and uncertainties posed by global financial and geopolitical risks, such as high inflation and interest rates. However, through 13 commitments, the FCA aims to tackle these challenges and implement a new regulatory framework.

For the insurance industry, key areas to consider include:

Financial crime: The FCA is committed to reducing and preventing financial crime by collaborating with organisations like the National Economic Crime Centre (NECC) and urging the financial sector to actively combat fraud and money laundering.

Consumer protection: Putting consumers’ needs first is crucial. Beginning in 2024/25, the FCA will conduct investigations and studies to enhance standards, particularly focusing on the insurance industry’s responsiveness to claims, especially for vulnerable customers.

Firm resilience: With an anticipated rise in corporate insolvencies, the FCA emphasises the importance of firms’ preparedness. Tools like the financial resilience return and wind-down planning remain crucial.

ESG priorities: Efforts toward environmental, social, and governance (ESG) priorities continue, with a focus on transitioning to net zero and addressing sustainability issues. Greenwashing will be addressed, and preparations for regulatory principles concerning ‘Nature’ are underway.

AI/Big Tech: The FCA recognises the significance of AI and Big Tech in shaping digital markets. Balancing risks and opportunities will be a key consideration.

Financial promotions: Clear and fair financial promotions are essential for consumers, especially in challenging times. The FCA will target promotions that are unclear, unfair, misleading, or unlawful.

Operational resilience: Timely continuity of critical business services is crucial. Starting from March 31, 2025, firms must ensure operational resilience without causing harm to consumers and markets. Expectations on reporting operational incidents will be clarified.

Appointed representatives: Oversight of appointed representatives remains a focus. Enhanced scrutiny and engagement with principal firms are planned, along with assertive supervision of high-risk principals.

Other commitments include strengthening the UK’s position in global markets, preparing financial services for the future, addressing problem firms, acting against market abuse, and improving the redress framework.

At GreenKite, we offer support in various areas aligned with the FCA’s focus, including fair value assessments, Consumer Duty, appointed representatives’ assurance work, and operational resilience guidance. For compliance needs, please reach out to us at [email protected].

Planting a seed?

We’d like to keep you up to date with GreenKite thinking, events and news. You’ll only hear from us when we’ve something we think is worth sharing.