New regulator must be smarter, faster and bolder says Panel

The Financial Services Consumer Panel has today made six recommendations that it believes are essential if the FCA is to deliver more effective protection for consumers than its predecessor, the FSA:

• Act more swiftly to prevent widespread consumer detriment
• Make effective use of consumer and market intelligence
• Utilise the full suite of its powers
• Ensure risks are prioritised and resources used effectively
• Deliver a credible deterrence
• Create and embed a culture in the FCA which will deliver its regulatory vision

The priorities are based on the Panel’s review of the FSA’s conduct regulation regime1. The review concentrated on three areas of FSA activity: PPI replacement products, packaged bank accounts and the impact of incentives or reward strategy. It found that the FSA had often acted too slowly to stop consumer harm despite significant concerns being raised.

Adam Phillips, Consumer Panel Chair commented:

“We hope that these recommendations will assist the FCA in developing a conduct regulation regime which is more effective in protecting consumers. We have seen so many financial scandals in recent years where the FSA has been on the back foot.

It cannot be right that considerable consumer detriment has built up before the FSA is able or willing to act. The FCA has to be smarter in using available intelligence, faster in analysing problems and bolder in its actions.

The FCA has the potential to deliver a revolution in consumer protection. However, this potential will only be realised if it can learn the lessons from the FSA’s experience of conduct regulation.”

Notes to editors
 

1. The Panel’s review of the FSA’s conduct regulation regime can be found on our website here[1].
2. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
3. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work[2]
4. Photographs and biographical details for Adam Phillips[3]
5. Panel members are appointed to serve a maximum of two terms of three years.