Financial Conduct Authority
FCA highlights its areas of concern in financial services markets
The Financial Conduct Authority (FCA) has today published its annual Sector Views, an assessment of the risks and potential harm to consumers across financial services markets.
The Sector Views look at the impact of macroeconomic developments and common drivers of change emerging across financial markets. They also outline areas where there may be a negative impact on consumers or the integrity of the financial system in that sector. The report sets out what factors are driving harm, as well as considering how the harm may develop over time.
The kinds of harms the FCA is concerned about, include:
- Although the FCA has seen a number of positive corrections in the credit market, our Financial Lives data shows that 7.4 million UK adults are over-indebted and find their financial commitment a burden.
- Pricing practices in insurance still penalise loyal customers – the ‘loyalty penalty’ in home and motor insurance cost 6 million longstanding consumers an extra £1.2 billion in 2018, and the FCA is finalising remedies following its market study.
- High-risk retail investment products are exposing consumers to more risk than they can absorb – some of the highest risk products are often marketed directly to retail consumers with poor communication of the risks involved and implications that the investments are regulated, when this is not the case.
- Many new payments firms have been able to enter the market and grow quickly, but some of their products don’t have protection in place for consumers, for example e-money services advertised as ‘current accounts’ aren’t covered by the Financial Services Compensation Scheme.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA and interim Chief Executive designate, said:
‘We are committed to reducing harm in the markets we regulate. Our analysis of markets ensures that we do this effectively, helping us to decide where to focus our attention. We expect firms to be similarly focused on preventing harm and assisting us where they can, and we will continue to actively supervise all firms to ensure they achieve this.
‘What is clearly apparent from the Sector Views, is that many of the harms we are seeing are created by a significant number of smaller firms we regulate or firms beyond our remit.
‘The findings in the report will contribute to our upcoming Business Plan and the decisions we make affecting consumers, market integrity and competition.’
Notes to editors
Latest News from
Financial Conduct Authority
FCA publishes annual report on the regulatory perimeter30/09/2020 10:25:00
The FCA has published its second annual perimeter report.
Update on Business interruption insurance test case appeals process29/09/2020 15:38:00
The deadline for parties to the FCA’s Business interruption insurance test case to file a 'leapfrog' application to appeal to the Supreme Court any aspects of the High Court’s Judgment was yesterday, Monday 28 September 2020.
Konstantin Vishnyak found not guilty of destroying documents29/09/2020 14:10:00
In a case brought by the Financial Conduct Authority (FCA), Konstantin Vishnyak has been found not guilty at Southwark Crown Court of one count of destroying documents in September 2018.
FCA institutes criminal proceedings against three former employees of Redcentric Plc25/09/2020 10:25:00
The FCA has begun criminal proceedings against three former employees of Redcentric Plc: Fraser Fisher, former Chief Executive; Timothy Coleman, former Chief Financial Officer; and Estelle Croft, a former finance director.
FCA launches consultation on the regulation of international firms24/09/2020 10:25:00
The FCA yesterday launched a consultation on its approach to the authorisation and supervision of international firms operating in the UK.
FCA sets out proposals to tackle concerns about general insurance pricing23/09/2020 10:25:00
The FCA yesterday published the final report of its market study into the pricing of home and motor insurance.
Christopher Woolard to chair review of unsecured credit market regulation17/09/2020 14:10:00
The Financial Conduct Authority (FCA) has announced that Chris Woolard will chair a review of the future regulation of the unsecured credit market, reporting to the FCA Board.
FCA proposes the next stage of support for consumer credit and overdraft customers17/09/2020 10:25:00
The Financial Conduct Authority (FCA) has announced proposals to ensure that firms provide tailored support for users of consumer credit and overdraft products who continue to face payment difficulties due to coronavirus (Covid-19).
FCA publishes Decision Notice against Corrado Abbattista for market manipulation16/09/2020 14:10:00
The FCA has published a Decision Notice today in respect of Corrado Abbattista, an experienced trader and a portfolio manager, partner and Chief Investment Officer at Fenician Capital Management LLP, for market abuse, imposing a financial penalty of £100,000 and prohibiting him from performing any functions in relation to regulated activity.