1. Our role
Our strategic objective is to ensure that the relevant markets work well. To advance our strategic objective we have three operational objectives:
Our approach to regulation
Our aim is to ensure that the UK has an effective, innovative and trusted financial services sector which meets the needs of its users – from individuals to multinational corporations. Our remit is a broad one and covers a wide range of firms, providing very different services to very different end users. As described in more detail in this Business Plan, we carry out a correspondingly broad range of activities to deliver our task.
All of our activities are ultimately driven, however, by our desire to embed a sustainable model of regulation for the long term. As set out in Our Strategy, published in 2014, we have sought to do this by taking a more ‘markets-based’ approach to regulation and more explicitly differentiating our approach to the different sectors we regulate and the different risks they pose.
Our approach is to look at markets or sectors as a whole and to take targeted action to drive the right incentives and conditions to deliver good outcomes for end users. Where there are common root causes then interventions at the market level can be an effective and powerful way of tackling and migrating problems across a large number of firms, which in turn benefits a large number of consumers.
Firms we regulate
‘Our aim is to identify and respond promptly and effectively to emerging issues, before they cause significant harm or grow in’
We take a judgement-based, forward-looking and preemptive approach to assessing potential and emerging risks to our objectives. Our aim is to identify and respond promptly and effectively to emerging issues, before they cause significant harm or grow in scale. Where risks have crystallised, we focus on ensuring that effective remedial action is taken which tackles root causes, as well as ensuring redress is paid and enforcement action taken if appropriate.
We believe that effective competition between providers can be a powerful driver of better conduct and better outcomes for consumers. We seek to ensure that our regulation is proportionate, up to date and strikes the right balance between permitting innovation that delivers consumer benefits and ensuring adequate consumer protection.
Transparent and accountable
We set out to be transparent with our stakeholders about the work we do, the outcomes we are seeking and how we measure our performance and success.
We recognise that measuring changes to outcomes that result directly from regulatory interventions is challenging, not least because it can often take several years before the impact can be seen and because regulatory interventions rarely happen in isolation. We do, however, monitor and report on a range of performance factors, such as the delivery of our business plan commitments, whether we are meeting our service standards, and our operational effectiveness and efficiency. In this Business Plan we have also included further details on the outcomes we are seeking to achieve in a number of priority areas, as well as setting out indicative success measures we will use to assess progress.
Another key element to evaluating our performance is our outcomes-based performance framework. The framework breaks down our statutory objectives into outcomes that we would like to see in the industry, indicators of these outcomes and performance measures.
|Statutory objectives||Ensuring that financial services markets function well|
|Securing an appropriate degree of protection for consumers||Promoting effective competition in the interests of consumers||Protecting and enhancing the integrity of the UK financial system|
|Outcomes||Consumers have access to fair products and services, which deliver what they promise||Consumers can be confident that firms treat them fairly and fix problems promptly||Competition contributes to improved consumer outcomes||Firms compete on clear costs and consumers have the information they need||Consumers can trust firms to be fit and proper and for financial markets to be clean||A respected regulatory system that lets good firms know where they stand|
|Outcomes indicators||Fair products and services||Building trust and engagement||Value for money products and services||Competitive markets||Clean regulated markets||Attractiveness of market|
|Improved consumer experience||Effective remedies||Getting better service||Clear and useful information||Low financial crime||Respected, joined-up regulation|
- ^ The PRA is the prudential regulator of banks, building societies, credit unions, insurers and designated investment firms, and is part of the Bank of England. We have a defined prudential regime for c. 24,000 firms. There is a larger population of consumer credit firms that are subject to high-level prudential resource requirements.
- ^ The FCA was created by the Financial Services Act 2012 which amended the Financial Services and Markets Act 2000 (FSMA).
- ^ As set out under the Financial Services and Markets Act 2000.
- ^ Exemption for instalment credit agreements, 18 March 2015.