FCA outcomes and metrics

Data Published: 07/04/2022 Last updated: 20/07/2022

We are committed to being clear about how we are accountable for our progress. On this page we set out what outcomes matter to us and the metrics we will use to measure them.

1. Introduction

Through our 3-year Strategy and 2022/23 Business Plan, we are becoming more accountable by creating a clear thread from the outcomes we are seeking to achieve for consumers and market participants, to the tools and interventions we are deploying as a result of the activities we are undertaking.

1.1. Outcomes, metrics and targets

Over the next 3 years we will deliver our statutory objectives by focusing on reducing and preventing serious harm, setting and testing higher standards, and promoting competition and positive change and competition. Our Strategy sets out our commitments to support these 3 focus areas, joining up our tools across sectors to deliver measurable outcomes, which we describe in more detail in our 2022/23 Business Plan.

In our Strategy we distinguish between 2 levels of outcomes:

  • Consistent topline outcomes we expect financial services markets to deliver - these stay the same from year to year and enable us to measure how we deliver our statutory objectives over time. On this page we set out the topline outcomes and metrics for Consumers and Wholesale markets with an initial baseline.
  • Our commitment outcomes, which we set over a 3-year period and review each year - we have 13 commitments that explain how we are joining up our actions to help create the conditions for financial services to deliver the outcomes we expect. We have included our proposed metrics related to our commitments and have linked these to our topline themes.

These metrics will be further developed and updated throughout 2022/23 as we enhance our understanding of how best to measure the outcomes we have set out, and if we need to reprioritise based on changing economic conditions. Last year we set out 7 strategic transformation-linked outcomes and metrics as part of our Business Plan 2021/22 and we report on these below. We have incorporated some of these transformation outcomes and metrics into the consistent topline outcomes or into our commitment outcomes for the next 3 years.

We have identified metrics for each of our outcomes and have 3 types:

  • metrics based on research data that record the attitudes, perceptions or behaviours of consumers/ firms (in particular, our Financial Lives survey (FLS) and the FCA and Practitioner Panel Survey)
  • metrics that best provide market data that measure or are indicative of the outcome
  • metrics based on our data that record FCA activities that help us to achieve the outcome

All metrics have limitations, especially in the context of dealing with complex and inter-related financial services outcomes, and we have set out some considerations for interpretation in the further detail for individual metrics. Progress will not be immediate and will not be steady from year to year. The movement of a metric is often affected by what other metrics, and other parties, are doing. We also need to consider how metrics may be affected by economic uncertainty or other factors beyond our control. We include baselines and don’t make a judgement in these pages on where we are now on certain metrics but focus on improving outcomes in the future. We include our intended direction of change for the metric - increase or decrease - over the long-term (unless otherwise specified), all things being equal.

But we recognise that a proper assessment of the reasons behind any changes in value is key to understanding whether an increase or decrease should be regarded as consistent with our stated outcomes. For example, a short-term jump in complaints or compensation claims may be driven by better consumer awareness of their rights or may reflect our adoption of new approaches to identify harm faster. It can take some time for effects to flow through because the data can lag behind misconduct. But over time, we might expect the numbers would reduce as firm conduct improves and there is less cause for complaint or a claim.

We intend to report on metrics regularly to monitor changes and over time, as we better understand the metrics we have proposed and how they are affected by wider economic shocks, we expect to include targets that we are aiming to reach. Monitoring these metrics will be one of the sources of evidence that inform the actions we take.  In some cases we indicate that a metric is under development. This may be where we are working to create a new metric, we plan to source new data or make other significant improvements to the existing metric. We will keep all metrics under review and consider whether they remain appropriate for the outcomes we are seeking to achieve or whether they should evolve or be replaced.  These reviews will include refreshing the data at appropriate times, in particular, when new annual data becomes available. We will continue to engage with stakeholders and partners so we can improve the way we measure outcomes. We welcome your views on the metrics and data we have proposed at [email protected].

Key data sources

We use 4 key data sources to inform multiple metrics across the outcomes. These are 2 research studies and data from 2 regulatory partners. Click on the key data sources below for further information, including links to where the metrics are used.

More information on the data sources in relation to specific metrics is available in the Further Detail links for each metric. We expect to broaden these key data sources over time.

1.2. Causal chains and benefits

We use our regulatory tools and interventions to deliver our regulatory strategy. These range from policy interventions (through new rules and guidance) to enforcement or supervisory action. We are enhancing the way in which we measure the effectiveness of our tools and interventions in delivering our stated outcomes.

We estimate that we delivered at least £11 of benefits for every pound spent on running the FCA, for a subset of our policy and enforcement activities undertaken over the 3 financial years to March 2021. In future we will improve and expand how we conduct this analysis, for example by including more of our tools and interventions. See our Positive Impact 2022 paper for an explanation of what these figures mean and how they are estimated.

We have started to explain how we expect our tools and interventions to deliver their end outcomes using causal chains and to identify specific metrics to monitor. We have an established impact evaluation programme which we will further develop so we can examine the impact of our work in more detail and get better at choosing the right intervention.

1.3. Activities with cost

Our activities cover the work we do that allows the tools and interventions to be deployed. We set out key operational metrics among the metrics we have identified for our commitments. We also have service standards in place which helps us understand where we do well and where we can improve.

2. Our topline outcomes and metrics

There are 4 consistent topline themes we expect from financial services, which cut across the markets and sectors we regulate – fair value, suitability and treatment, confidence, and access. We use these 4 themes to help us define consistent topline outcomes for consumers and wholesale markets.

We will review these outcomes over time to ensure they remain suitable. In particular, if the Future Regulatory Framework Review’s proposed new secondary long-term growth objective is confirmed, we anticipate incorporating an outcome that aligns with it.

We have established metrics as an indicator of progress against our topline outcomes for consumers and for wholesale markets. We provide an overview of our initial set of metrics and the opening values for each one that will provide a baseline against which to compare future values. For each of these metrics we set out our intended direction of travel, the baseline value, the source, and brief explanatory text. We also provide further detail about the data, how the metric is calculated, some points to consider when interpreting the numbers and, where relevant, previous values, potential improvements, and links to related material.

2.1. Consumer topline outcomes and metrics

The following baseline metrics indicate our progress against our Consumer outcomes for fair value, suitability and treatment, confidence, and access.

Fair value

Fair value icon

Outcome: Consumers receive fair prices and quality

We measure this with 2 metrics:

Metric CFV1-M01: Reduction in the proportion of consumers who, in the last 2 years, have been offered a financial product or service they wanted, but at a price, or with terms and conditions, they felt to be ‘completely unreasonable’

This Financial Lives survey (FLS) metric measures whether consumers perceive they are receiving fair prices and/or quality based on a ’completely unreasonable’ perception. Note that ‘completely unreasonable’ is used for the purposes of questionnaire design and doesn’t represent a threshold as to what we perceive fair value to be.

Baseline value: 7% of consumers (2020)

Source: FCA FLS

Metric CFV1-M02: Increase in aggregate benefits from our policy work

The metric provides an indicator of the estimated value of the benefits that result from a subset of our policies. Most of these estimated benefits are for consumers and SMEs.

Baseline value: at least £5.5 billion in benefits (3-year annual average)

Source: FCA analysis of past Cost Benefit Analyses

Suitability and treatment icon

Suitability & treatment

Outcome: Consumers are sold suitable products and services and receive good treatment

We measure this with 2 metrics:

Metric CST1-M01: Increase in consumer satisfaction with their providers

This FLS metric provides an indicator of the degree of consumers’ satisfaction with their own providers in the financial services industry.

Baseline value: 7.8 composite index out of 10 (2020).

Source: FCA FLS

Metric CST1-M02: Reduction over time in upheld Financial Ombudsman Service complaints about unsuitable advice or mis-sold products and services

We use complaints data to help assess the treatment of customers by firms and to highlight potential concerns such as a lack of product or service suitability or issues with specific firms. We monitor complaints including and excluding Payment Protection Insurance (PPI) and also those with recent event dates – where the event that caused the complaint was during 2020 or 2021.

Baseline value: 

Complaints with any event date

Upheld complaints Uphold rate
19,965 35% (including PPI 2021)
15,159 48% (excluding PPI 2021)

Complaints with an event date in 2020 or 2021

Upheld complaints Uphold rate
1,338 34% (including PPI 2021)
1,331 34% (excluding PPI 2021)

Source: FCA analysis of Financial Ombudsman Service data

confidence icon

Confidence

Outcome: Consumers have strong confidence and levels of participation in markets, in particular through (1) minimised harm when firms fail and (2) minimised financial crime

We measure this with 1 metric, underpinned by measures of minimised harm when firms fail and minimised financial crime:

Metric CCO1-M01: Increase in the proportion of consumers who have confidence in the UK financial services industry

This FLS metric provides an indicator of the level of consumer confidence in the UK financial system.

Baseline value: 42% of consumers (2020).

Source: FCA FLS

Confidence icon

Outcome: ... (1) minimised harm when firms fail

We measure this with 2 inter-linked metrics because these measures need to be considered together:

Metric CCO2-M01: Stabilise and then reduce over time Financial Services Compensation Scheme (FSCS) compensation, claims and payments

This metric provides a measure of the volume of claims and the volume and value of compensation payments to consumers as result of failures of financial firms which could impact consumer confidence in the financial system. This metric is heavily affected by recent economic conditions and needs to be considered alongside CC02-M02. It can take some time for effects to flow through to the FSCS because claims lag behind misconduct and ultimately firm failures.

Baseline value:

  • 28,007 new claims
  • 43,407 payments made
  • £584 million of compensation paid (2020/21)

Source: FSCS Annual Report

Metric CCO2-M02: Monitoring the number of firm failures

This metric provides an indicator of the extent of firm failures occurring in the financial services market. Firm failures are a normal part of business, but can harm consumers, the effectiveness of markets, and overall confidence in the UK’s financial system. This metric will be heavily affected by wider economic circumstances. It needs to be considered alongside CCO2-M01.

Baseline value: 234 consumer firms (2021)

Source: FCA data

Confidence icon

Outcome: ... (2) minimised financial crime

We measure this with 5 metrics as there is not one single data source on crime and these metrics need to be considered together:

Metric CCO3-M01: Slow the fall in or increase the proportion of consumers who fully or partially recovered sums lost to scams

This FLS metric is a broad indicator of the extent to which consumers who lost money due to scams (such as push payment fraud or use of personal details, account or debit card without permission) and were able to recover it – which could impact their confidence in the financial system. The majority of the scams picked up by this metric are scams we have no or limited power to tackle as they are unrelated to financial products. This is the best metric we have available at this time and we will continue to consider more targeted ways of measuring this.

Baseline value: 81% of those consumers who lost money to scams (2020)

Source: FCA FLS

Metric CCO3-M02: Increase in the proportion of Authorised Push Payment (APP) fraud losses that are reimbursed

This metric provides an indication of the proportion of APP fraud losses recovered. A higher level of recoveries will increase consumer confidence in the financial system.

Baseline value: 43.2% of total APP fraud losses reimbursed (2020)

Source: UK Finance (data to be refreshed when available)

Metrics CCO3-M03: Slow the growth in or reduce investment fraud victims and losses

This metric provides an indicator of the prevalence of investment fraud in the UK and is made up of the following typologies within NFIB data: 

  • pension liberation
  • fraud recovery
  • share sales / boiler room
  • pyramid / ponzi schemes
  • other financial investments

Higher cases and losses to this type of fraud will reduce consumer confidence in the financial system.

Baseline values: 26,275 total reported victims, £755.3m total reported losses (2021)

Source: NFIB

Metric CCO3-M04: Slow the growth in or reduce Authorised Push Payment (APP) fraud cases and losses

This metric provides an indicator of the prevalence of APP fraud in the UK. Higher cases and losses to this type of fraud will reduce consumer confidence in the financial system.

Baseline values: 149,946 total reported cases, £479m total reported losses (2020)

Source: UK Finance (data to be refreshed when available)

Metric CCO3-M05 under development: Increase in proportion of applications rejected, withdrawn or refused by the FCA under Money Laundering Regulations (MLRs) or for financial crime reasons

 

This metric provides an indicator of the strength of our gateway in minimising financial crime within the regulatory perimeter. This metric needs to be considered alongside CCO3-M03-M04 because if, over time, financial crime falls we would not expect to have a continuing increase in the number of applications rejected, withdrawn or refused. In time we may also see fewer unsuccessful applications if application quality improves.

Baseline value: 49 Annex 1 applications - (22.4%) were rejected, withdrawn or refused. This comprises all firms, across consumers and wholesale markets. (2021).

Source: FCA data, MLR registrations currently reported to Treasury annually. This metric is the same as the topline metric for Wholesale markets Confidence – see Metric WCO2-M03

Access icon

Access

Outcome: Diverse consumer needs are met through (1) high operational resilience and (2) low exclusion

 

We measure this with 3 metrics – 1 relating to operational resilience and 2 relating to low exclusion:

Metric CAC1-M01: Reduction in the number of operational incidents

Operational disruptions can cause wide-reaching harm to consumers and pose a risk to market integrity, threaten the viability of firms and cause instability in the financial system. Future work on the completeness and granularity of incident reporting is expected to improve this data.

Baseline value: 599 incidents – Consumer firms (2021)

Source: FCA data

Metric CAC2-M01: Reduction in the proportion of consumers who were declined a product or service in the last 2 years, and, in their view, this was due to non-financial factors such as their age, health or ethnicity

This FLS metric is a measure of the extent to which consumers who have been denied access to a financial product or service think non-financial factors contributed to this. We use this perception as an indicator of the potential level of financial exclusion that, in some cases, may be caused by firms’ conduct.

Baseline value: 19% of those consumers who were declined a product or service (2020)

Source: FCA FLS

Metric CAC2-M02: Reduction in the proportion of consumers who do not hold certain key products

This FLS metric is a measure of the extent to which consumers do not hold certain key financial products (for example, general insurance) and is therefore an indicator of the potential level of financial exclusion that might be caused by firms’ conduct.

Baseline value:

  • 1% of consumers were unbanked (ie had no day-to-day account)
  • 12% had no general insurance
  • 21% had no private pension provision (2020)

Source: FCA FLS

2.2. Wholesale markets topline outcomes and metrics

The following baseline metrics are indicators of our progress against our Wholesale markets outcomes for fair value, confidence and access.

Fair value

Fair value icon

Outcome: Market participants are able to make well informed assessments of value and risks due to appropriate transparency

We measure this with 2 metrics:

Metric WFV1-M01: Maintain the proportion of firms confident that the FCA’s oversight ensures relevant financial markets function well

The FCA’s delivery of our overall strategic objective will, to a significant extent, be met through market participants being able to make well informed assessments of value and risks due to appropriate transparency.

Baseline value: 93% - Wholesale markets firms (2021)

Source: FCA and Practitioner Panel Survey

Metric WFV1-M02: Reduction in the number of FCA actions for potential failure of listed firms to disclose properly

This metric shows the number of enquiries initiated by the FCA’s Primary Market Oversight into possible failures by issuers to meet their market disclosure obligations. This metric is an indicator of the extent to which listed firms are being transparent in their declarations to the market.

Baseline value: 330 actions (2021)

Source: FCA case management system

confidence icon

Confidence

Outcome: Markets are (1) resilient to firm failures and (2) clean with low levels of market abuse, financial crime and regulatory misconduct

We measure this with 4 metrics – 1 relating to firm failures and 3 relating to market abuse, financial crime and regulatory misconduct:

Metric WCO1-M01: Monitoring the number of firm failures

This metric provides an indicator of the extent of firm failures occurring in the financial services market. Firm failures are a normal part of business, but can harm consumers, the effectiveness of markets, and overall confidence in the UK’s financial system. This metric will be heavily affected by wider economic circumstances.

Baseline value: 7 Wholesale markets firms (2021)

Source: FCA data

Metric WCO2-M01: Maintain the proportion of firms confident that the FCA’s oversight protects and enhances the integrity of the UK financial system

Firms’ confidence in our delivery of this strategic objective is one important factor that will influence overall confidence in markets.

Baseline value: 94% - Wholesale markets firms (2021)

Source: FCA and Practitioner Panel Survey

Metric WCO2-M02: Increase in market cleanliness – decrease in the values of our market cleanliness statistics

These metrics provide an indicator of potential market abuse in equity markets. They comprise of 3 separate measures:

  • Market Cleanliness (MC)
  • Abnormal Trading Volume (ATV)
  • Potentially Anomalous Trading Ratio (PATR)

It is difficult and potentially misleading to draw meaningful conclusions from year-on-year changes in these measures.

Baseline value:

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Metric WCO2-M03 under development: Increase in proportion of applications rejected, withdrawn or refused by the FCA under Money Laundering Regulations (MLRs) or for financial crime reasons

 

This metric provides an indicator of the strength of our gateway in minimising financial crime within the regulatory perimeter. This metric needs to be considered in a wider context because if, over time, financial crime falls we would not expect to have a continuing increase in the number of applications rejected, withdrawn or refused.  In time we may also see fewer unsuccessful applications if application quality improves.

Baseline value: 49 Annex I applications (22.4%) were rejected, withdrawn or refused. This comprises all firms, across consumers and wholesale markets.

Source: FCA data, MLR registrations currently reported to HM Treasury annually

This metric is the same as the topline metric for Consumers Confidence – see Metric CC03-M05 

Access icon

Access

Outcome: Markets are orderly in a variety of conditions so that market participants are able to access a diverse range of services with minimised operational disruption

We measure this with 1 metric:

Metric WAC1-M01: Reduction in the number of operational incidents

Operational disruptions can cause wide-reaching harm to consumers and pose a risk to market integrity, threaten the viability of firms and cause instability in the financial system. Future work on the completeness and granularity of incident reporting is expected to improve this data.

Baseline value: 194 incidents - Wholesale markets firms (2021)

Source: FCA Technology, Resilience and Cyber data

3. Our strategic transformation-linked outcomes and metrics

  • In our 2021/22 Business Plan we committed to reporting 7 strategic outcomes and related metrics that aligned with our transformation programme. We report against these outcomes here.
  • For each of these metrics we set out our intended direction of travel, a latest value and recent years where available, the source and brief explanatory text. We also provide further detail about the data source, how the metric is calculated, some points to consider when interpreting the numbers and, where relevant, potential improvements and links to related material.
  • Some of these metrics align with those we use for our topline and commitment outcomes and in other cases, the metrics may differ but use the same data sources. We point out these cross-references where appropriate. Despite this consolidation, we have reported these metrics separately for transparency purposes regarding our 2021/22 Business Plan.

The following metrics are indicators of our progress against our strategic transformation-linked outcomes.

Setting the bar high to support sustainable innovation for consumers

We measure this with 1 metric:

Metric STO1-M01: Increase in aggregate benefits to consumers from our policy work

Consumers will be the primary beneficiary of our policy work, and so the value we report here is the same as for our topline metric for Consumers. Some of these benefits may also fall on firms or other parties but it is not possible to estimate the amount with much accuracy. The benefits reported only relate to a subset of our policy work and this is the first time we have compiled this metric.

Metric value: at least £5.5 billion (3-year annual average)

Source: FCA analysis of past Cost Benefit Analyses

This metric is also now one of the topline metrics for Consumer Fair Value – see Metric CFV1-M02

Setting the bar high to support market integrity in wholesale markets

We measure this with 1 metric:

Metric STO2-M01: Increase in market cleanliness - decrease in the values of our market cleanliness statistics

We will continue to monitor, and expect improvements in, our suite of market cleanliness statistics. For 2021, the MC measure was 7.7%, the ATV measure was 7.1% and the PATR measure was 6.1%. While this represents a decrease from the previous year, it is difficult and potentially misleading to draw meaningful conclusions from year-on-year changes in these measures as these figures need to be considered in the round.

Metric value: 

 

2018

2019

2020

2021

Market Cleanliness (MC)

10.0%

17.5%

21.9%

7.7%

Abnormal Trading Volume (ATV)

6.2%

6.4%

8.0%

7.1%

Potentially Anomalous Trading Ratio (PATR)

6.1%

6.7%

6.9%

6.1%

Source: FCA market cleanliness statistics, calculated from FCA transaction data and prices from data vendors.

This metric is also now one of the topline metrics for Wholesale markets confidence – see Metric WCO2-M02.

Ensuring firms start with high standards and maintain them

We measure this with 2 metrics:

Metric STO3-M01: Increase in FCA-led refusal/withdrawal/rejection rates for new firm authorisations

As we strengthen our gateway and early years supervision, we are monitoring our refusal/withdrawal/rejection rates. We expect these to increase initially as we make the gateway more robust. In 2021 there has been an increase in refusal, withdrawal and rejection rates from 8% to 15%.

Metric value:

 

2020

2021

FCA-led refusal/withdrawal/rejection rates for new firm authorisations

8%

15%

Source: FCA data

Metric STO3-M02: Reduction over time in Financial Ombudsman Service complaints about newly authorised firms - involving their first 3 years of authorisation

As we strengthen our gateway and early years supervision, we are monitoring complaints about newly authorised firms. By giving more support for firms in these early years, we expect to see the number of relevant ombudsman service complaints fall over time. In 2021, there has been a reduction in upheld complaints (down by 50%) and in the uphold rate (down by 8 percentage points to 33%).

Metric value:

 

2020

2021

Upheld complaints

625

312

Uphold rate

41%

33%

For current firms authorised / registered

2018-20

2019-21

Source: FCA analysis of Financial Ombudsman Service complaints and FCA data

Using new approaches to find issues and harm faster

We measure this with 1 metric:

Metric STO4-M01: Stabilise and then reduce over time Financial Services Compensation Scheme (FSCS) compensation, claims and payments

We will evaluate our efforts to reduce disorderly failure by monitoring the value and volume of FSCS claims, with the aim of stabilising and then reducing these over a multi-year period to bring down the FSCS levy on the industry. The number of new claims and payments made fell in 2020/21, but the amount of compensation paid out increased.

Metric value:

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This metric is also now one of the top-line metrics for Consumer confidence – Metric CCO2-M01

Tackling harm and misconduct to maintain trust and integrity

We measure this with 1 metric:

Metric STO5-M01: Increase in the number of firms whose permissions are removed or restricted permanently or temporarily

We expect our increased capability to detect harms and signs of misconduct and act faster will lead to an initial increase in the number of firms whose permissions we remove or restrict either permanently or temporarily

Metric value:

760 firms had permissions removed or restricted either temporarily or permanently (2021)

Source: FCA data. This includes intervention action in Supervision, Threshold Conditions and ‘Use It or Lose It’ cases. This is a newly collated metric and we do not have previous years data.

Enabling consumers to make informed financial decisions

We said we would measure this with 4 metrics shown here, albeit our thinking on how best to measure this has now developed through our work on New Consumer Duty and the commitment on putting consumers’ needs first:

Metric STO6-M01: Reduction in the number and proportion of calls to the FCA that need redirecting to Financial Ombudsman Service or Financial Services Compensation Scheme

With increased communication with consumers, we expect a reduced number and proportion of calls to the FCA that we need to direct elsewhere. In 2021, there was a reduction in both the number and proportion of calls that we needed to redirect to the ombudsman service or FSCS.

Metric value:

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Metrics STO6-M02, STO6-M03 and STO6-M04: Increase in the effectiveness of the ScamSmart campaign

With increased communication with consumers, we expect increased effectiveness of our ScamSmart campaigns, including increased use of the ScamSmart website and clicks through to the Financial Services Register. Our data shows how our pension and investment campaigns have affected awareness.

Metric STO6-M02: Increase in the effectiveness of the ScamSmart pension scams campaign

Metric value:

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Metric STO6-M03: Increase in the effectiveness of the ScamSmart investment scams campaign

Metric value:

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Metric STO6-M04: Increase in the use of the ScamSmart website and clicks through to the Financial Services Register

These analytics represent total views annualised, across all ScamSmart campaign activity. Note: in Autumn 2019 a new opt-in cookie policy significantly impacted the number of users and page views.

Metric value:

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Diversity and Inclusion across the industry

We measure this with 1 metric:

Metric STO7-M01: Increase in the proportion of female and minority ethnic colleagues

To ensure we are as diverse and inclusive as possible, we are continuing to monitor and set targets for ourselves. As of December 2021, we have seen improvements in our diversity at nearly all levels from the previous year.

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4. Measuring the outcomes of our commitments

Our 2022/23 Business Plan sets out our 13 commitments for the next 3 years. 

For each commitment we have identified the outcomes we wish to achieve for consumers and wholesale markets and have started to develop a series of metrics to monitor our progress towards these. We have also linked each outcome to our consistent top-line themes.

These initial metrics are set out below where we also summarise key points about the metrics we have chosen. We recognise that no metric is a perfect measure of the outcome and that all metrics have limitations. We explain below some key points of interpretation about the metrics.

Some of these metrics use the same data sources as we have used for our top-line and transformation outcomes. We point out these cross-references where appropriate.

Where the metrics we have identified to monitor our outcomes already exist, we provide baseline values. Where metrics are not yet available, we explain what metrics we are planning to develop and monitor in the future. As with all our metrics, we plan to continuously improve and develop over time and will continue to add metrics and their baseline values as they become available.

View the outcomes and metrics for each of our commitments:

4.1 Dealing with problem firms

4.2 Improving the redress framework

4.3 Reducing harm from firm failure

4.4 Improving oversight of Appointed Representatives

4.5 Reducing and preventing financial crime

4.6 Delivering assertive action on market abuse

4.7 Putting consumers’ needs first

4.8 Enabling consumers to help themselves

4.9 Our environmental, social and governance (ESG) priorities

4.10 Minimising the impact of operational disruptions

4.11 Preparing financial services for the future

4.12 Strengthening the UK’s position in global wholesale markets

4.13 Shaping digital markets to achieve good outcomes  

We welcome your views on the metrics we have proposed at [email protected].

4.1. Dealing with problem firms

We have proposed 5 metrics to track our 2 outcomes related to dealing with problem firms.

Our proposed perception metrics (DPF1-M01 and DPF2-M01) are new and will rely on a survey of firms and require further development. We intend to rework existing survey questions related to FCA action to cover the effectiveness of our use of the Threshold Conditions and other intervention powers (Threshold Conditions are the minimum conditions which a firm is required to satisfy, and continue to satisfy, to be given and retain permissions).

We have also focused on 3 operational metrics which reflect the step change we want to make in the way we deal with problem firms. We expect to improve these metrics as we make further investments in this area.

First, we expect that the metric for cancellations and withdrawals of permissions (DPF1-M02) will increase over the next 3 years, before then declining as relevant firms adjust their conduct to fit with our expectations. This short-term rise will reflect the increase in our effort to intervene when firms fail to meet the Threshold Conditions. We recognise that a long term aim to increase cancellations and withdrawals of permissions is not what we want. So we will keep this metric under review to ensure there are no unintended consequences.

Second, we intend to introduce an operational metric related to the volume of interventions (broadly defined) (DPF2-M03), which we expect will increase, as we scale up our ability to intervene. These interventions include instances in which we limit a firm’s or individual’s activities or withdraw selected permissions.

Third, we intend to intervene quicker and are proposing developing a metric (DPF2-M02) on the speed with which we intervene after we have identified harm.

We recognise that we are dealing with problem firms across many of our commitments and this will also contribute to our success in this area.

Consistent Topline Theme

Outcomes

Metrics

Confidence

Consumers and market participants have confidence that financial services firms which fail to meet the Threshold Conditions are identified and cancelled quickly

 

Metric DPF1-M01 under development: Increase in awareness of, and perceived effectiveness of, FCA enforcement action related to Threshold Conditions

Metric DPF1-M02: Increase in number of cancellations and withdrawals of permissions over the next 3 years

This is to reflect an increase in our effort to intervene when firms fail to meet the Threshold Conditions

Baseline value: 373 cancellations and withdrawals of permissions (annual average)

Source: FCA data

Confidence

Consumers and market participants trust that the FCA intervenes to stop harm to consumers and market integrity quickly

Metric DPF2-M01 under development: Increase in awareness of, and perceived effectiveness of, FCA interventions

 

Metric DPF2-M02 under development: Reduction in time between identification of firm causing serious harm and decision on use of intervention tool

 

Metric DPF2-M03 under development: Increase in use of intervention tools following identification of firm causing serious harm.

 

4.2. Improving the redress framework

We have set out 4 outcomes related to improving the redress framework and proposed 8 metrics to monitor our progress against those outcomes.

One of the proposed metrics uses FCA complaints data (IRF2-M01). The nature of metrics based on complaints and data from the Financial Services Compensation Scheme (FSCS) (IRF3-M01) is such that these will always be ‘after the event’ and therefore are lagging indicators, so it will take some time before the impact of our work in this commitment begins to show through. FSCS complaints may also be affected other drivers of firm failure such as economic conditions.

The context of these metrics is important, especially as redress events can span multiple years and complaints only tell us part of the story. For example, a rise in complaint volumes may indicate an increase in levels of consumer awareness about historical instances of harm, so we are seeking to measure awareness of the redress system as well (IRF4-M01). We recognise the limitations of this metric in capturing consumer understanding of the redress system as well as awareness. This is complex and we may explore how to develop this further.

Regarding our first outcome, we expect the embedding of policy changes, as well as our approach to supervising the claims management companies (CMC) sector, to drive fair value for consumers. We are developing new metrics in our Financial Lives Survey (FLS) that measure the extent to which consumers derive fair value from the services CMCs provide.

Our first metric will look at the proportion of consumers whose expectation is met when they use CMCs (IRF1-M01). To focus on the price element of value, the second metric will look at the proportion of consumers who consider that the fee they pay to CMCs for non-PPI financial services claims is fair (IRF1-M02). It is important to note that these questions ask consumers about their subjective experiences and the outcome of their actual claims can therefore influence this perception.

Our third metric (IRF1-M03) would measure our ability to prevent directors of failed Independent Financial Advisers (IFA) from exploiting their past poor conduct through their involvement in the CMC sector. We note that CMCs are also regulated by the Solicitors Regulation Authority so our metrics will only reflect part of the consumer experience.

We will also consider whether there may be options to further develop data to track complaints, redress and related issues over time. We are exploring potential new data sources that would facilitate this, as well as potential ways to improve the data we already collect. For example, we are considering the feasibility of metrics in relation to complaint resolution (IRF2-M02 and IRF2-M03) that would better capture the fairness of complaint resolution, in addition to timeliness.

Further detail on Financial Services Compensation Scheme data and Financial Lives survey data

Consistent top-line Theme

Outcomes

 

Metrics

Fair value

The Claims Management Companies (CMC) sector delivers fair value

 

Metric IRF1-M01 under development: Of those consumers who used a CMC in the last 3 years, an increase in the proportion who consider that the service provided met their expectations

 

Metric: IRF1-M02 under development: Of those consumers who used a CMC in the last 3 years, an increase in the proportion who consider that the fee they paid was fair

 

Metric IRF1-M03 under development: Decrease in estimated reappearance rate in new FCA authorisations of directors of failed Independent Financial Advisers in connection with CMCs

 

 

Confidence

The redress system delivers timely and fair complaint resolution and compensation to consumers

Metric IRF2-M01: Increase in the overall timeliness of firms’ complaint resolution measured by the proportion of complaints closed within 3 days, between 3 days and 8 weeks, and after 8 weeks

Baseline value:

Complaints closed within 3 days: 48.8%

Complaints closed after 3 days but within 8 weeks: 44.89%

Complaints closed after 8 weeks: 6.31% (H2 2021)

Source: FCA Firm Complaints data

Metric IRF2-M02 under development: Increase in complaints upheld by firms, measured by increase in proportion of complaints upheld by firms from FCA complaint data

 

Metric IRF2-M03 under development: Increase in instances of firms putting things right by themselves

 

Confidence

Firms that create redress burden bear the associated cost themselves

 

Metric IRF3-M01: Stabilisation of the redress burden arising from insolvent firms’ unpaid liabilities through FSCS claims over a multi-year period, with a view to a subsequent reduction.

Baseline value: 28,007 new claims; 43,407 payments were made, and compensation payments amounted to £584m (FY 2020/21)

Source: FCA analysis of FSCS data

This metric uses the same data as the topline metrics for Consumer Confidence– see CCO2-M01, and strategic transformation metric – STO4-M01

Confidence

Consumers understand the redress system and how to access it

 

Metric IRF4-M01: Increase in proportion of consumers who are aware that they can make a compensation claim for mis-selling of a financial product or service directly, without using a claims management company

Baseline value: 64% of consumers (2020)

Source: FCA FLS

4.3. Reducing harm from firm failure

Firm failure is inevitable in every market. When financial firms fail, there are risks of consumer harm such as loss of client assets or threats to wider market stability.

Our outcomes are designed to ensure that these risks are minimised and where firms do fail, they do so with minimal harm to consumers and wider markets.

Regarding the metric on the proportion of firms meeting financial resources requirements (PFF1-M01), a low and stable proportion of firms who do not meet their financial requirements indicates that firms are generally able to conduct business and wind down without causing significant harm. The metric does not perfectly capture progress towards the outcome because not all prudential regimes are harm based. So even where firms meet their financial resource requirements, they can cause harm. It is still a reasonable indicator.

On the metric looking at CASS audits (PFF2-M01), a low and stable proportion of firms with adverse CASS audits indicates that firms generally hold client assets and funds appropriately. To calculate this metric, we remove the ‘Limited assurance’ opinions as these are clean audits for firms that do not have the relevant permissions for client assets.

We are currently developing a metric (PFF3-M01) that would allow us to track progress towards quickly identifying firms that are subject to financial or other stress.

 

Consistent top-line Theme

Outcomes

 

Metrics

Confidence

Firms meet their financial resource requirements so that they can conduct business, wind down and, where applicable, fail without causing significant harm to consumers and market participants

 

Metric PFF1-M01: A low and stable proportion of firms not meeting financial resources requirements

Baseline value: 2.3% of firms (as at 07 March 2022)  

Source: FCA regulatory returns

 

Confidence

Client assets and funds are appropriately held so that if the firm fails, they are returned as quickly, and as whole, as possible

Metric PFF2-M01: A stable proportion of firms with ‘adverse’ reasonable assurance CASS audit opinions with a target rate of below 10%

Baseline value: 5.9% of firms (2020)

Source: FCA regulatory returns

Confidence

Firms subject to financial, or other, stress which may lead to firm failure are quickly identified and the firm rectifies the situation, winds down solvently, or enters insolvency in a way which minimises harm to consumers and market participants​

 

Metric PFF3-M01 under development: We are developing a metric which will enable us to monitor the accuracy with which we identify firms’ resilience to financial or other stress.

4.4. Improving oversight of Appointed Representatives

We will monitor data from principal and non-principal firms on the number of complaints raised (OAR1-M01). We ultimately expect these to decrease when customers get suitable information, advice and products from Appointed Representatives (ARs).

We anticipate any reduction in complaints will lag behind the changes we are making to improve oversight of ARs and it will take time to see the impacts of our work in the data. We may also see increases in the short term where our work reveals the misconduct that drives complaints. We will continue to evolve our measures as the work progresses and the data we obtain improves, including exploring how FSCS claims attributed to principals and ARs compares to FSCS claims attributed to non-principal firms. We will also consider how the number of complaints to principal firms compare, in the longer term, with references to the ombudsman service and upheld complaints.

As the Appointed Representatives Regime crosses the breadth of the financial services sector, to measure the success of our work we will also use metrics related to the outcomes of other commitments where ARs are operating. This will be particularly relevant to wholesale, where we will seek to establish market participants’ perceptions of our effectiveness and the strength of the regulatory regime (GWM1-M01 and GWM2-M02)

In addition, we have identified an operational metric (OAR2-M01) which monitors the withdrawal rate of notifications to us by firms wishing to add ARs to their permissions.  We expect to see this increase in the short to medium term. We are also looking to add a metric (OAR2-M03) on the volume of supervisory cases and volume of interventions tools linked to ARs. Again, we expect to see this increase in the short to medium term.

Further detail on Financial Services Compensation Scheme data and ombudsman service data.

Consistent top-line theme

Outcomes

 

Metrics

Suitability and treatment/ confidence

Stronger oversight by principals to reduce harm caused through ARs

 

Metric OAR1-M01: Reduction over time in volume of complaints to firms about principal firms (P) compared to non-principal firms (NP) (per £1m of revenue from regulated activities)

Baseline Value:

Firm complaints (2019-2020 H1):

<200k

  • GI intermediaries – 12.1 (NP), 58.8 (P)
  • Advisers & intermediaries –1.5 (NP), 3.6 (P)
  • Mortgage intermediaries -5.1 (NP), 4.1 (P)

£200k-1m

  • GI intermediaries – 9.2 (NP) 20.2 (P)
  • Advisers & intermediaries –1.1 (NP), 1.8 (P)
  • Mortgage intermediaries -2.9 (NP), 4.5 (P)

£1-5m

  • GI intermediaries – 21.7 (NP) 27.5 (P)
  • Advisers & intermediaries –2.1 (NP), 4.8 (P)
  • Mortgage intermediaries -6.5(NP), 6.9 (P)

>5m

  • GI intermediaries – 85.7 (NP), 145.6 (P)
  • Advisers & intermediaries –2.5 (NP), 3.7(P)
  • Mortgage intermediaries -2.5 (NP), 12.6 (P)

 

Source: FCA firm complaints data

We recognise the baseline data here is from 2019-2020 (H1). We plan to update this with more recent data in due course.

 

Metric OAR2-M01: Increase in the withdrawal rate following notifications to us by principal firms wishing to add new ARs in the short to medium term

Baseline value: 4% of AR notifications (2021)

Source: FCA data

Metric OAR2-M02 under development: Increase in the volume of FCA supervisory cases and volume of intervention tools linked to ARs in the short to medium term. We will break this down by sector.

 

4.5. Reducing and preventing financial crime

The Government is developing its economic crime plan and fraud action plan, with its partners, including the FCA. While counter-fraud work is already underway, in the short to medium-term fraud offences are likely to continue to rise as fraudsters take advantage of changes in consumers’ lifestyles and behaviours. We are likely to also see a higher number of frauds being reported as consumer awareness increases.

Where our powers and remit mean we can have an impact on investment fraud and Authorised Push Payment (APP) fraud, we set ourselves ambitious outcomes and we measure how effective we are in achieving them. There are wide-ranging drivers of the different types of fraud and an array of parties who can affect its prevalence and impact on victims. The effect on outcomes depends on those partners working together and taking actions, as well as us. The incidence of fraud is also affected by levels of consumer awareness and consumer behaviour, so it is challenging to isolate and measure the impact of our interventions on fraud.

We have chosen to use metrics that best represent the outcomes from the available data, although there are some limitations.

National Fraud Intelligence Bureau (NFIB) data (PFC1-M01) does not allow us to determine how much reported fraud relates to authorised or unauthorised firms. There may also be a degree of misclassification in the data. We have narrowed the respective categories and will only draw on NFIB data relating to fraud within our remit and are our priorities for the next 3 years. As we develop our data capabilities and understanding of the fraud landscape these priorities may change.

For APP fraud as there is no equivalent category within NFIB data we will track progress against the APP fraud outcome using UK Finance data (PFC2-M01). This does not cover all authorised firms. But it does give a comprehensive view of the fraud outlook by analysing data from 300 member firms, all of which provide credit, banking, markets and payment-related services in the UK.

Our money laundering metrics identify two things – an increase in the metric as an indicator of the strength of our gateway to ensure high standards and minimise financial crime within the regulatory perimeter (the legal boundary between what we do and don’t regulate) (PFC3-M01) and as an indicator of our approach to sanctions (PFC3-M02). Over time, as our work on money laundering and financial crime has wider impacts, we might expect these metrics to stabilise as firms adjust their conduct to fit with our expectations.

Our operational metric (PFC4-M01 and PFC4-M02) focuses on cases opened in relation to financial crime and fraud. This reflects the fact that we expect to see an increase in fraud supervisory cases in the short term. But as our strategy develops, we expect to reduce the number of cases opened in the longer term.

Our Office for Professional Body Anti-Money Laundering Supervision (OPBAS) metric focuses on improving effectiveness (PFC3-M03). OPBAS will look to externally validate and benchmark where possible. This includes through data e.g. Reg 46a reports, engagement, and intelligence sharing across the ecosystem of fellow supervisors, regulators, intelligence agencies and law enforcement partners.

 

Consistent Topline Theme

Outcomes

Metrics

 

 

 

 

Confidence

Slow the growth in investment fraud victims and losses

Metric PFC1-M01: Reported investment fraud victims and losses.

The metric provides an indicator of the prevalence of investment fraud in the UK and is made up of the following typologies within NFIB data:

  • pension liberation
  • fraud recovery
  • share sales/ boiler room
  • pyramid/ponzi schemes
  • other financial investments

Baseline values: 26,275 total reported victims, £755.3m total reported losses (2021).

Source: NFIB. 

This metric is the same as the topline metric for Consumer Confidence – see CCO3-M03 

Slow the growth in Authorised Push Payment (APP) fraud cases and losses

Metric PFC2-M01: Reported APP fraud cases and losses.

The metric provides an indicator of the prevalence of APP fraud in the UK

Baseline values: 149,946 total reported cases, £479m total reported losses (2020).

Source: UK Finance (data to be refreshed when available)

This metric is the same as the topline metric for Consumer Confidence – see CCO3-M04

Reduction in financial crime by lowering the incidence of money laundering through the firms we supervise directly and by improving the effectiveness of supervision by professional body supervisors

 

 

Metric PFC3-M01 under development: Increase in the proportion of applications rejected, withdrawn or refused by the FCA under Money Laundering Regulations (MLRs) or for financial crime reasons

Baseline value: 

49 Annex I applications (22.4%) were rejected, withdrawn or refused (2021)

Source: FCA data, Money Laundering Regulations (MLR) registrations currently reported to HM Treasury annually.

This metric is the same as the topline metrics for Consumer Confidence – see CCO3-M05, and Wholesale markets Confidence – see WCO2-M03

Metric PFC3-M02: Increase in the number of customer and payment sanctions alerts generated by firms as reported through the annual financial crime data return.

Baseline value: 7,629 alerts (2019/20)

Source: FCA regulatory returns

Metric PFC3-M03 under development: Change in Professional Body Supervisor (PBS) effectiveness over time.

Baseline values: OPBAS September 2021 report

Source: OPBAS (Supervision, Intelligence and Policy)

 

Metric PFC4-M01: Number of cases opened relating financial crime.

Baseline value: 548 Financial crime cases opened (Apr 2020 – Mar 2021)

Source: FCA data

 

Metric PFC4-M02 under development: Number of cases opened relating to fraud

 

4.6. Delivering assertive action on market abuse

We are developing a new range of metrics to assess our outcomes on market abuse.

We already have our broad measure of market cleanliness (AMA3-M01), which is one indicator of possible insider dealing but can be affected by other factors such as sample size or high volatility. We want to develop other measures too. We are working to better measure the perceptions of market participants about market integrity and cleanliness (AMA1-M01 and AMA1-M02). Additionally, we will measure progress in our work to enhance corporate transparency by considering the number of overall interventions to promote better disclosures (AMA2-M01). This measure will be affected by our capacity to detect poor disclosures as well as overall market conditions. A decrease in the number of interventions may indicate that standards are improving, so this metric will need to be interpreted alongside indicators of market cleanliness.

 

Consistent Topline Theme

Outcomes

Metrics

Access

Increased confidence in the integrity of UK markets which maintains high levels of participation across the buy-side and sell-side

Metric AMA1-M01 under development: Increase in perceived effectiveness of our action to promote market integrity 

 

Metric AMA1-M02 under development: Increase in cleanliness of UK markets (compared to other markets) as perceived by market participants

 

Confidence

Timely and accurate disclosure of corporate information 

Metric AMA2-M01 under development: Increase in the number of FCA interventions, broadly defined, for failure of listed firms to disclose properly

 

Confidence

Financial firms and issuers are more resilient to market abuse, having robust systems and controls, high- quality reporting practices and a strong anti-market abuse culture. 

Metric AMA3-M01: Decrease in values of our market cleanliness (MC) statistics. The MC statistic is one indicator of possible insider dealing, but it has several limitations as a measure of broader market cleanliness, especially given the fall in sample size over the past decade

Baseline value: This metric is the same as the topline metric for Wholesale Markets Confidence – see WCO2-M02, and the Strategic Transformation outcome – see STO2-M01

Source: FCA market cleanliness statistics, calculated from FCA transaction data and prices from data vendors

Confidence

Criminal, civil and supervisory sanctions are brought to bear on wrongdoers to provide effective deterrents

Metric AMA4-MO1 under development

 

4.7. Putting consumers' needs first

The Consumer Duty will play a key role in delivering the outcomes that we want to see in this area. These metrics are subject to change as we finalise the policy, and the data that we obtain improves. It will also take time for the data to reflect the change in policy.

We expect to measure the success of our activities in this area in a variety of ways, so we will use the insights we gather from supervisory work, for example, to supplement these high-level metrics.

Where we use complaints data (CNF1-M01, CNF2-M01, CNF4-M01), we recognise that any reduction in complaints will lag behind the changes that we make to improve outcomes for consumers and it will take time to see the impacts of the work in the data. We may also see increases in complaints in the short-term as our measures increase consumers’ awareness of poor practice by firms.

Some of the metrics reflect Financial Lives survey (FLS) questions (CNF2-M02, CNF4-M02, CNF5-M01, CNF5-M02), and do not always completely align with the standards we expect of firms. For example, in relation to fair value, the term ‘completely unreasonable’ is used for the purposes of questionnaire design and doesn’t represent the threshold for what we perceive as fair value. We are also adding a new question to the FLS (CNF3-M01) to help us understand consumer perceptions of the information they are given and if it enables them to make timely and informed decisions as a result.

We will continue to work with government and wider partners to support financial inclusion within financial services. We have included an outcome and metric (CNF6-M01) which reflects our current focus on maintaining access to cash.

Find out more about the Financial Lives Survey data and the Financial Ombudsman Service data

 

 

Outcomes

Metrics

 

 

 

 

Suitability and treatment

Consumers are sold products and services that are designed to meet their needs and characteristics

Metric CNF1-M01: Reduction over time in upheld Financial Ombudsman Service complaints about unsuitable advice or mis-sold products and services

Baseline value: See Metric CST1-M02

Source: FCA analysis of Financial Ombudsman Service data

 

 

 

 

Fair value

Consumers get products and services which are fair value

Metric CNF2-M01: Reduction over time in upheld Financial Ombudsman Service complaints about charges, fees and commission and premium pricing  

Baseline value:

2785 upheld complaints, 32% uphold rate (2021)

(complaints with any event date)

1375 upheld complaints, 28% uphold rate (2021)

(complaints with event date in 2020 or 2021)

Source: FCA analysis of Financial Ombudsman Service data

Metric CNF2-M02: Reduction in the proportion of consumers, including those in vulnerable circumstances, who, in the last 2 years, have been offered a financial product or service they wanted, but at a price, or with terms and conditions, they felt to be ‘completely unreasonable’. 

We use ‘completely unreasonable’ as it fits the questionnaire design; it doesn’t represent a threshold of what we perceive as fair. We also recognise that the question is asking consumers about their experiences in the past 2 years, so it will take time to show any changes that will result from our work.

Baseline value: 7% of consumers (8% vulnerable, 6% not vulnerable) (2020)

Source: FCA FLS

See Metric CFV1-M01

Suitability and treatment

Consumers understand the information they are given and make timely and informed decisions as a result

Metric CNF3-M01 Under development: Addition of new questions to the Financial Lives survey (FLS) to understand consumer perceptions of the information they are given, as one way to help us assess this outcome.

 

 

 

Suitability and treatment

 

 

Firms provide consumers with good customer support

 

Metric CNF4-M01: Reduction over time in upheld Financial Ombudsman Service complaints about administration or customer service, account access, delays and terminations, account closure, cancellation of policies

Baseline value:

12830 upheld complaints, 32% uphold rate (2021).

(Complaints with any event date)

9668 upheld complaints, 32% uphold rate (2021)

(Complaints with event date in 2020 or 2021

Source: FCA analysis of Financial Ombudsman Service data

 

Metric CNF4-M02: Maintain or reduce the proportion of consumers (with product(s) in that sector), including those in vulnerable circumstances, who have had a problem with a product in the last 12 months and the problem relates to: sales pressure (for consumer credit: pressure to take on additional credit), poor customer service, IT system failure/service disruption, provider errors/not following instructions, delays when making changes to an account, delays when arranging an account, and/ or unsuitable channel (phone, online, face to face) to contact the provider

Baseline value:

2020

  • Retail banking - 12% (vulnerable 13%, not vulnerable 11%)
  • Mortgages - 7% (vulnerable 7%, not vulnerable 7%)
  • Consumer credit - 11% (vulnerable 14%, not vulnerable 8%)
  • General insurance and protection - 7% (vulnerable 9%, not vulnerable 6%)
  • Pension accumulation - 6% (vulnerable 7%, not vulnerable 4%)
  • Pension decumulation - 8% (vulnerable 11%, not vulnerable 6%)
  • Savings - 6% (vulnerable 7%, not vulnerable 5%)
  • Retail investments - 12% (vulnerable 13%, not vulnerable 12%

Source: FCA FLS

 

 

 

 

 

Confidence

Consumers have confidence in financial services markets

Metric CNF5-M01: Increase the proportion of consumers, including consumers in vulnerable circumstances, who slightly or strongly agree that they have confidence in the UK financial services industry

Baseline value: 42% of consumers (36% vulnerable, 47% not vulnerable) (2020)

Source: FCA FLS

See Metric CCO1-M01

Metric CNF5-M02: Increase the proportion of consumers, including consumers in vulnerable circumstances, who slightly or strongly agree that most financial firms are honest and transparent in the way they treat them

Baseline value: 35% of consumers  (30% vulnerable, 39% not vulnerable) (2020)

Source: FCA FLS

 

 

 

 

Access

Appropriate access to financial services is maintained

Metric CNF6-M01: Continued tracking of access to cash.  We’ll report our findings until the Government legislates and a level of cash access has been set for us to monitor against.

Current data:

Access to any bank, building society, Post Office branch, or any ATM (either free or pay-to-use):

95.7% of the UK population are currently within 2km of a cash access point

99.7% of the UK population are currently within 5km of a cash access point

(2021, Q3)

Source: FCA data request

Access to cash coverage in the UK 2021 Q3

 

4.8. Enabling consumers to help themselves

Inappropriate financial promotions (by authorised and unauthorised entities), the inappropriate actions of authorised firms involved in non-standard investments and the actions of unauthorised entities (who are required to be authorised) can all lead to a range of consumer harms, including unsuitable purchases and financial losses.

Our outcomes are to ensure that the potential for these harms to occur is reduced.

To track progress against these outcomes, we propose operational metrics that track our input into delivering them. Our work on financial promotions is closely linked to the outcomes on other commitments – for example, putting consumer needs first – and should be considered alongside those.

Our metric related to the number of interventions on non-compliant financial promotions (IHT1-M01) refers to the use of regulatory tools to mitigate potential or actual harm to consumers and markets. An increase of interventions over the next 3 years indicates that we are more effectively able to address promotions that are likely to lead to mis-selling and financial losses. We anticipate an increase over the next 1-2 years, followed by a flattening.

Our metric (IHT3-M02) related to the reduction in the number of consumers investing in HRIs who indicate a low risk tolerance indicates that our interventions are helping to ensure consumers invest in products better suited to their needs and circumstances. For further information on metric IHT3-M01 which looks at reported investment fraud volumes and losses, please see the Reducing and preventing financial crime section.

On our metric on the number of warnings placed on our website (IHT2-M01), a rise in the number of warnings issued over the next 3 years signals that we are more effectively able to address activity by unauthorised entities that has the potential to lead to mis-selling and financial losses. As with our other interventions, we anticipate an increase over the next 1-2 years, followed by a flattening.

Consistent Topline Theme

Outcomes

Metrics

Suitability and treatment

Reduce the potential for consumer financial losses arising from mis-selling of products due to the issuing of non-compliant financial promotions by authorised entities

Metric IHT1-M01: An increase in the number of interventions on non-compliant financial promotions by authorised firms
 

Baseline value: 573 interventions (2021)   

Source: FCA data

 

 

Suitability and treatment

Reduce the potential for consumer financial losses and mis-selling of products due to the issuing of illegal financial promotions by unauthorised entities

Metric IHT2-M01: An increase in the number of warnings on our website relating to unauthorised entities

Baseline value: 1,410 warnings (2021)   

Source: FCA data

 

Suitability and treatment

/Confidence

Reduce the potential for financial loss from scams and the mis-selling of high-risk non-standard investments involving authorised firms​

Metric IHT3-M01: Reported investment fraud victims and losses
The metric provides an indicator of the prevalence of investment fraud in the UK.

Baseline values: 1,951 reported victims, £43.8m total reported losses (2020). 26,275 total reported victims, £755.3m total reported losses (2021)

Source: NFIB 

This metric is the same as the top-line metric for Consumer Confidence – See CCO3-M03

Metric IHT3-M02: Reduction in the proportion of consumers investing in high-risk investments (HRIs) whose general tolerance to risk is very low or who demonstrate characteristics of vulnerability

Baseline values: 42% of those consumers with high-risk investments (2020)

Source: FCA FLS

 

4.9. Our environmental, social and governance (ESG) priorities

Through the FCA Strategy and the environmental, social, and governance (ESG) Strategy we published in November 2021, we are strengthening our focus on ESG-related issues. We have identified target outcomes and, for the first time, are building specific metrics to accompany them.

Some of these are non-financial: they focus on perception and trust, the quality of disclosures, and similar. These can be challenging to design and implement and we do not have a pre-existing baseline against which to assess them. We will use survey data, intelligence from engagement and case data (where relevant) to measure progress.

We are committed to measuring our success with respect to the outcomes we want to see and will be building out our framework in the coming months.

 

Consistent Topline Theme

Outcomes

Metrics

Fair Value (consumers and wholesale markets)

High-quality climate- and wider sustainability-related disclosures to support accurate market pricing, helping consumers and market participants choose sustainable investments and drive fair value.

Metric NZE1-M01 under development: Increase in quality and quantity of climate-related and sustainability disclosures (metric for quality to be determined) 

 

 

Confidence

Trust and consumer protection from misleading marketing and disclosures around ESG-related products.

Metric NZE2-M01 under development: Monitor the incidence of misleading marketing for ESG products 

 

Metric NZE2-M02 under development: Increase in consumer trust of ESG related products ​ 

 

Metric NZE2-M03 under development: Monitor Enforcement and Supervisory cases of financial crime, fraud, and mis-selling of ESG related products

 

Confidence

Active investor stewardship that positively influences companies’ sustainability strategies, supporting a market-led transition to a more sustainable future.​

Metric NZE3-M01 under development: We are working with industry leaders and other regulators to decide how to develop  indicators for the effectiveness of stewardship 

Active investor stewardship has been identified as an important way to pursue environmental and social goals in the transition to a more sustainable future. We will develop a metric that indicates how investor engagement and the exercise of existing shareholder rights, such as shareholder resolutions and voting, are being used to encourage positive ESG outcomes.

 

4.10. Minimising the impact of operational disruptions

Operational disruptions are inevitable. Firms must be able to prevent and respond to these disruptions. Where firms can’t, consumers can lose access to essential services and confidence in financial services. While we would ideally reduce these disruptions to zero, this is not a realistic goal. Instead, we will aim to reduce the impact of these disruptions to consumers and markets.

To minimise this impact, we are seeking to ensure that important business services provided by firms are resilient to operational disruption. To measure our success, we will develop a new metric (IOD1-M01) based on the volume, scale, severity, and time to remediate operational disruptions.

While this metric is being developed, we will monitor the overall number of operational incidents (metric CAC1-M01 and metric WAC1-M01). Over the next 2 years, it is possible that we will see an increase in disruptions, as more firms correctly report disruptions to us. As one of our goals is to refresh the rules through which firms report incidents, we expect to see a short-term uptick in incidents. This will give us greater visibility of incidents of which we might previously have been unaware. We will keep refreshing our approach to firms reporting incidents to us and the PRA, to make it clearer for firms what, when and how they should be reporting. Over the medium term (year 3 and beyond), we then expect that reported incidents will drop.

Many factors which contribute to the occurrence of incidents fall outside of our control. For example, the ongoing conflict in Ukraine means that cyber-attacks are more likely on UK firms. It is not possible to factor out these risks from our disruption metric. But with that understood, our goal is nevertheless to minimise disruptions to consumers and markets from operational incidents

Consistent Topline Theme

Outcomes

Metrics

Access

Important business services provided by firms are resilient to operational disruption

Metric IOD1-M01 under development: Reduction in impact (scale, severity, time to remediate) of operational disruptions to firms’ important business services, as measured by FCA Technology, Resilience & Cyber Department

While this metric is being developed, we will monitor the overall number of operational incidents (metric CAC1-M01 and metric WAC1-M01).

4.11. Preparing financial services for the future

We now have the freedom to tailor our rules to better suit UK markets. The Future Regulatory Framework (FRF) will change the statutory and regulatory framework that we operate in. HM Treasury has proposed to give us greater powers to set rules and regulate in a way that is properly adapted to the needs of UK firms, markets and consumers. We have an important role in implementing the new framework so that it is fit for the future.

This work supports all of our topline outcomes and focuses on creating confidence in financial markets. When any legislative changes have been fully implemented, we will measure our success by how effectively we respond to any change in our remit, accountability arrangements or wider obligations and how we embed firm facing requirements from legislation into our rules. We are focused on metrics that reflect the way consumers and firms have confidence in the FCA (PFS1-M02) and the UK financial system (PFS1-M01). These metrics are clearly affected by many other factors. We will also consider other ways of assessing the effectiveness of our work in this commitment. For example, we are also considering how we can best monitor the orderly transfer of firm-facing requirements from legislation into our Handbook.

 

Topline theme

Outcomes

Metrics

All topline outcomes, but particularly Confidence

The FRF supports all of our top-line outcomes and creates confidence in financial markets

Metric PFS1-M01: In the longer term, once any legislative changes have been fully implemented, increase in the proportion of consumers who slightly or strongly agree that they have confidence in the UK financial services industry.  

Baseline value: 42% of consumers (2020)

Source: FCA FLS

This metric uses the same data as the topline metric for Consumer Confidence – see CCO1-M01 and putting consumer needs first – see CNF5-M01

Metric PFS1-M02: Increase in FCA Practitioner Panel Survey mean perceived effectiveness of the FCA

Baseline value: scores on a 10-point scale; 7.2 (fixed firms) and 7.1 (flexible firms) (2021)

Source: FCA and Practitioner Panel survey section 2.2 

 

 

Ensuring orderly transfers of firm-facing requirements from legislation into our Handbook

 

We will continue to assess and monitor the regulatory pipeline through the Regulatory Initiatives Forum and Grid, to understand the impact of the transfer on firms.

 

 

4.12. Strengthening the UK’s position in global wholesale markets

We seek a UK wholesale market which supports both the domestic economy and growth whilst maintaining high standards of consumer protection. This will be achieved if the UK continues to be regarded as one of the leading global markets of choice for issuers, intermediaries and investors alike when compared to other high-quality markets.

Market excellence is affected by a wide variety of factors. For example, general levels of activity and attractiveness may be affected by wider economic circumstances.

We are working to measure how the market perceives our overall regime so we can consistently keep track of market sentiment and understand where our regime could be improved further.  These metrics could be biased by the sample of participants being surveyed so we will work to ensure our sample includes a variety of market participants. We aim to engage with market participants on their perceptions of our actions (GWM1-M01, GWM2-M02, GWM3-M01) as well as using existing measures (GWM2-M01), albeit these measures are often also affected by other factors.

Operationally, metrics such as turn-around times for new and changes in authorisations for wholesale firms, funds, regulated activities, and capital markets (GWM3-M02) will indicate if we are improving our efficiency.  These measures can be affected by overall levels of activity in the market and the quality of applications as well as our efficiency in processing applications.

 

Consistent Topline Theme

Outcomes

Metrics

Confidence

The regulatory framework is clear, well-understood and trusted by all market participants. 

The framework supports market participants determining fair value.

Where outcomes are not being met, this is clearly communicated, and remediation is swiftly undertaken or enforced. 

Metric GWM1-M01 under development: Increase in perceived effectiveness of FCA’s role and impact in regulation of the wholesale markets

Access

The UK is regarded by market participants as one of the top markets of choice, with innovation viewed as encouraged and supported in the UK markets, and regulation viewed as appropriately evolving to address new opportunities and risks

Metric GWM2-M01: Working with partners, maintain the UK’s  top 5 position in the New Financial global financial centres index

This measures the overall financial activity across all sectors and considers a number of qualitative factors related to overall economic performance.  It ranks different jurisdictions based on these factors.

Baseline value: UK is ranked second in this index (June 2021)

Source:  New Financial global financial centres index

 

 

Metric GWM2-M02 under development:  Increase in perception of market participants on the strengths of the regulatory regime in the wholesale markets

 

Access

Market participants regard the regulatory framework as proportionate both in terms of speed and cost  

Metric GWM3-M01 under development: Increase in perception of market participants on the proportionality of the regulatory regime in the wholesale markets

 

 

 

Metric GWM3-M02: Increased proportion of cases meeting authorisation turnaround targets for wholesale funds, regulated activities, and capital markets.

Baseline value: Listing Transactions voluntary standards met:

New issuer: First response within 10 days 

  • 2018/19 - 99.5%
  • 2019/20 - 99.4%
  • 2020/21 - 100.0%

Existing issuer: First response withing 5 days

  • 2018/19 - 100%
  • 2019/20 - 99.5%
  • 2020/21 - 99.7%

New issuer: subsequent proof response withing 5 days

  • 2018/19 - 99.2%
  • 2019/20 - 99.5%
  • 2020/21 - 99.4%

Existing issuer: subsequent proof response withing 3 days

  • 2018/19 - 99.7%
  • 2019/20 - 99.2%
  • 2020/21 - 99.6%

Other queries within 5 days

  • 2018/19 - 99.2%
  • 2019/20 - 99.6%
  • 2020/21 - 99.2%

Source: FCA Service Standards

4.13. Shaping digital markets to achieve good outcomes

The digitalisation of financial services is changing the way consumers make decisions and markets operate. To be an effective regulator, we must both respond to today’s challenges and prepare for those of tomorrow. We need to better understand the emerging risks and opportunities so that the huge benefits to consumers are captured and the important harms mitigated.

Core to this work is a pro-active approach to identifying potential harms and benefits. Metrics will be developed as the work progresses (SDM1-M01). We are considering, for example how best to measure our effectiveness in addressing digital ‘sludge’ (SDM1-M01). Harmful digital choice architecture can make it difficult for consumers to make decisions that are in their best interest and for them to receive fair value. A reduction in the instances where the digital design is considered by us to be harmful, will lead to more consumers receiving fair value. One way of assessing this is, for example, using webscraping to inspect relevant websites, such as in high-cost credit.

 

Consistent top-line theme

Outcomes

Metrics

Fair value

The development of digital markets and the use of new technologies in financial products and services leads to fair value for consumers.

Metric SDM1-M01 under development: We will develop metrics through our work exploring the potential future impacts of digital developments on financial services markets.

Suitability and treatment

The consumer journey for digital financial products and services enables consumers to take decisions in their best interest.

Metric SDM2-M01 under development: Reduction in sludge and other harmful digital design features in areas where we have taken action