The Financial Services Compensation Scheme (FSCS) has welcomed the priorities set out in the Financial Conduct Authority’s (FCA) business plan, which it says will help lower the rising FSCS levy.
The FCA released its business plan earlier today, and stated its mission to become a more innovative, assertive and adaptive regulator, which it will work towards over the next one to three years, as well as other cross-cutting and sector work.
Where it can progress this work now, without undermining the focus on the coronavirus response, it has revealed that it will do so.
FCA lays out plans for change
But the regulator has explained that it recognises that it may be weeks or months before it is in a more stable position and can turn itself fully to the activities in the plan.
Caroline Rainbird, chief executive of the FSCS, said: “The FCA’s continued aim to become a forward-looking, proactive regulator will undoubtedly help bring down the rising FSCS levy, which we know is a real burden on many firms and sadly represents high levels of consumer harm experienced over many years.
“We have been clear that tackling the root causes of these harms is the only way to sustainably reduce the levy over the coming years, and it is very encouraging to see the detail in the FCA’s business plan around this.
“FSCS already works very closely with the FCA, sharing insights from the unique perspective we have on the finance industry.
“Through the claims we see, valuable data and trends emerge around consumer behaviour, firm failures and bad actors in the market.
“Our collective work in this space has already delivered great results, such as the recent announcement to ban claims management phoenixing.
“We look forward to continuing this relationship including a focus on consumer investments through the new coordination group announced in the FCA’s plan.
“As our latest Annual Report sets out, FSCS is performing extremely well. 2020/21 was our most successful operational year to date, with record levels of customer satisfaction, further improvements made to our claims service and strong progress against our strategy to promote protection and prevent consumer harm.
“We welcome the FCA’s review into the scope and coverage of our compensation as part of their consumer priorities, and we are already working closely with them on how to take this forward in the right way.
“We all recognise that the complex problem of consumer harm will only be solved by the entire industry working together, supported by those with the powers to make changes and enforce them.
“We will continue to support calls for change that will positively impact consumers, as we have most recently with the push for financial harms to be included in the Online Safety Bill.”