The interim CEO of the Financial Conduct Authority (FCA), Christopher Woolard, has raised a series of imminent reforms the regulator faces, in a wide-ranging speech delivered this afternoon.
In the speech, delivered at City Week 2020, Woolard explained that come the autumn, the regulator will see the results of a number of reviews into “potential failures of the regulatory system”. To this, he said he has “no doubt” there will be painful lessons and “the FCA will need to learn from them”.
The chief executive provided an indication of the scale and context in which the FCA operates. Woolard explained that it handles 204,000 calls a year from consumers and firms, and through its online system it receives half a million data submissions from firms. It receives and monitors 38 million market transactions a day.
But according to Woolard, there are more ways the FCA is changing and needs to change to be ready for the future. The first is how it uses data and analyse the intelligence it receives.
Woolard explained that the FCA “cannot hope to effectively regulate 60,000 firms”, most of them small, as the FCA does, unless it makes progress on this front.
Last year, the FCA put in place a new data strategy to make sure it brought in the analytical skills it needs, to raise the minimum standard of data understanding among all its staff, to ensure it has the kit to take full advantage of the skills it has and the huge amount of data it holds.
According to the interim CEO of the watchdog, embedding this is “well under way.”
Earlier this month, the FCA announced it will be undertaking an unsecured credit review, and Woolard, who will be leading the review himself, made a brief reference to its scope.
He said: “We can see a real difference in terms of impact on the haves and have nots in this crisis that doesn’t conform to the patterns of previous economic shocks. But for the poorest and most vulnerable in society there is still a demand for credit.
“Increasingly some of that demand is being met by changes in business models and new developments in unsecured lending including the growth of unregulated products in retail and the workplace.”
Woolard explained that this shift poses fundamental questions about the unsecured credit market.
The chief executive concluded that if anything, the last six months have “shown we can think creatively about what we do and how we do it.”
Woolard said: “It has shown that we need to work closely with other agencies and regulators as product boundaries become blurred. That the FCA’s own requirements should be more straightforward, especially for smaller firms. And we need to make sure the rulebook isn’t analogue in a digital age.”
Woolard’s term as interim chief executive will end on October 1 2020. Nikhil Rathi was announced back in June to take his place.