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Clifford Chance

Clifford Chance

Regulatory Investigations and Financial Crime Insights

Responding to change and challenge: FCA publishes its Business Plan for 2020/21

On 7 April 2020, the FCA released its Business Plan for 2020/21, setting out its priorities for the year ahead, with specific focus on the unprecedented challenges arising from the coronavirus (Covid-19) pandemic. In this context of uncertainty and disruption, the Business Plan is understandably shorter in length this year.


The FCA recognises that Covid-19 is profoundly affecting the financial lives of consumers and the workings of markets. Over the coming months, the FCA's main priorities are to ensure that financial services businesses give people the support they need, that people don't fall for scams, and that financial services businesses and markets know what is expected of them.

Priority areas

Looking ahead to the medium term, the FCA identifies five key priorities for the next one to three years:

  • Transforming how the FCA works and regulates – the FCA seeks to make faster and more effective decisions, and to adopt a regulatory approach centred upon end outcomes for consumers, markets and firms.
  • Enabling effective consumer investment decisions – the Business Plan highlights significant risk in the pensions and retail investments sector. The FCA will look to ensure that investment products are appropriate for consumer needs, that consumers make effective decisions about their investments, and that firms operate under high regulatory standards.
  • Ensuring consumer credit markets work well – the FCA acknowledges that Covid-19 will have a considerable impact on both consumers and firms in relation to credit markets. The FCA proposes to put in place measures that will allow firms to exercise greater flexibility where it is in the best interests of consumers.
  • Making payments safe and accessible – the FCA is concerned that Covid-19 will affect payments firms' financial strength and consumers' ability to access cash and payment services. The FCA will work closely with other regulators, particularly the Payment Services Regulator, to address common issues such as access to cash and fraud. Firms' systems and controls will be assessed, to ensure they are adequate to prevent financial crime.
  • Delivering fair value in a digital age – in an era of "Big Data", the FCA wants to guarantee that greater digitalisation, innovation and competition harness benefits for consumers. The FCA will develop an approach with measurements and metrics to assess fair value for consumers.


The FCA reminds firms that it has the ability and power to tackle significant harm to markets and consumers caused by regulated firms aiming to take advantage of Covid-19. The FCA is collaborating with other regulators and law enforcement agencies to raise awareness of the increased risk of scams during the outbreak.

The FCA reiterates the importance of understanding the drivers of culture, noting that its focus over the coming year will shift towards smaller firms. The FCA will move more swiftly to enforcement action against firms that consistently fail to meet its required standards.

For the financial year ending 31 March 2020, the FCA has achieved 217 outcomes using its enforcement powers and has imposed fines totalling £224,428,900.

Cross-sector priorities

The Business Plan also sets out the FCA's cross-cutting work across sectors in areas that have a broad market impact. This includes:

  • Brexit – the FCA continues to take steps to ensure that the financial services industry is prepared for the end of the transition period.
  • Climate change – in the coming year, the FCA will assess feedback to its recent consultation on new climate-related disclosures, which remains open until October 2020. The FCA will also research the extent to which consumers are able to make effective decisions on 'green products'.
  • Innovation and technology – the FCA aims to use new technologies and skills to regulate more efficiently. It is investing in systems and processes to enable more effective use of the information and intelligence it receives, including, for example, by streamlining data and regulatory returns through Digital Regulatory Reporting.
  • Operational resilience – the FCA and PRA's joint consultation on operational resilience is open until October 2020 and sets out the regulators' expectation that firms take ownership of their operational resilience. This means firms should identify their important business services, consider how disruption to these services could cause harm to customers or market integrity, and put in place contingency plans to deal with major events. The regulators are actively evaluating the contingency plans of a wide range of firms.
  • Financial crime – the FCA intends to make greater use of data to identify firms or areas that are potentially vulnerable to financial crime and will continue to take enforcement action where serious misconduct is uncovered, particularly where there is a high risk of money laundering. The FCA has also implemented a new registration and supervision regime for cryptoasset activities.
  • Culture – there is continued focus on firms' purpose, leadership, approach to rewarding and managing people, and governance. Solo-regulated firms are expected to comply with the requirements of the Senior Managers and Certification Regime as they fall due. See our recent post for more information on senior managers' obligations in response to Covid-19.

Key takeaway points

It is noteworthy that the Business Plan is significantly more brief and high-level than seen in the past, which may be indicative of the current resource pressure the FCA is facing as a result of Covid-19 and Brexit, with these issues likely to dominate the FCA's work over the next year. The FCA notes that the Business Plan will be kept under review and may need to be updated if necessary as the position becomes clearer. Firms should also closely monitor their own processes as unfolding events develop, with emphasis on protecting consumers.

The FCA's plans to make faster and more effective decisions as part of its own transformation will no doubt be welcomed by firms amid concerns in the industry around delays in enforcement investigations. The FCA's ambition to deliver more efficient outcomes is in line with its Approach to Enforcement published this time last year, which highlighted the FCA's commitment to "end investigations promptly". Alongside this, the FCA acknowledges that the current regulatory framework is too focused on rules and process, and not enough on principles and outcomes.

The new prominence of climate change as a standalone cross-sector priority may also be of interest to firms. There is increasing regulatory attention on climate change risk and green finance, reflecting the heightened importance of the role of the financial services industry in supporting a greener economy. More information on how firms can address environmental issues can be found in our Climate Change Risk Hub.

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