Charles Randell speech at the Annual Public Meeting 2019

Speech by Charles Randell, Chair of the FCA, delivered at our 2019 Annual Public Meeting.

Speaker: Charles Randell, Chair
Event: Annual Public Meeting 2019, London
Delivered: 17 July 2019
Note: this is the speech as drafted and may differ from the delivered version

Highlights:

  • The context in which we work is constantly changing. We need to think about how we can meet our growing responsibilities with finite resources.
  • We must recognise that we don’t get things right every time. And we must strive to constantly improve.
  • As well as taking on the challenges of the present, we’re also looking ahead to ensure we’re the most responsive, agile regulator we can be.

This is my second APM as Chair of the FCA. Since taking on the role in April last year, I’ve had the privilege of travelling all around the UK, meeting consumers, businesses, politicians, charities and many others. What is striking in these conversations is that the work of the FCA has a real impact on people up and down this country. And it often invites strong feelings. This is a reflection of the very central role financial services play in consumers’ everyday lives. This has been brought home to me in some of the visits I’ve done in last few months.

In Belfast, for example, the complex history of the city adds another dimension to financial challenges, such as illegal money lending. In Stoke I heard about the problem of access to cash as bank branches disappear from the high street.

the work of the FCA has a real impact on people up and down this country. And it often invites strong feelings.

2019 marks 6 years since the FCA came into being. When it began in 2013, the FCA faced a daunting task. Firstly, dealing with the mountain of conduct issues that became evident in the wake of the crisis. And secondly, taking on the regulation of 34,000 consumer credit firms.

Under Andrew’s leadership and the publication of the Mission in 2017, the FCA began a new phase. The Mission reaffirmed consumer harm as the guiding principle of all our work, helping us prioritise in the face of a growing remit and an evolving demographic and economic landscape. In this context, we have been thinking about how we can meet our growing responsibilities with finite resources – how we can deliver the maximum public value. Part of this is reflecting on our past performance and considering what we can do differently to best deliver on our objectives.

It’s right that we now think about the most effective way of dealing with issues at the boundary of our remit. Not least because bad actors see opportunities to exploit consumers in those grey areas. Today’s technology is also lending urgency to this question, as new products and services enter the market at speed, with the ability to reach large numbers of consumers. We published our first report on the perimeter last month, which considers the challenges it throws up today and where it might lie in the future.

Reviewing our past actions

The issue of our perimeter is of profound significance to the public we’re here to serve – and one that has caused deep frustration in some cases. I believe that it’s vital that we’re transparent about what we can and can’t do in the confines of our current remit. The perimeter report is an important tool to this end. But we must also recognise that we don’t get things right every time. And we must strive to constantly improve, in order to keep ahead of a fast-moving, ever-evolving sector.

I believe that it’s vital that we’re transparent about what we can and can’t do in the confines of our current remit.

That‘s why we have commissioned an independent review into London Capital & Finance by Dame Elisabeth Gloster, a very senior retired judge. London Capital & Finance was an authorised firm which issued retail mini-bonds. The review will consider our supervision of the firm and the circumstances around its collapse. It’s a very serious case which has had a significant impact on thousands of people.

We’re also proceeding with independent reviews of two cases whose roots lie in the pre-FCA period – the Connaught Income Series 1 Fund and Interest Rate Hedging Products.

Completing the FCA’s transformation

I’ve said that the context in which we work is constantly changing – the burgeoning use of data analytics in financial decision-making is one obvious example. Brexit is another – and preparing for the UK’s exit from the EU is clearly an immediate priority. The financial system throws up many urgent challenges that need to be addressed, many of which can’t be managed by the FCA alone.

Low levels of financial resilience, financial literacy and savings are just the first that pop to mind. And they come at a time when consumers are being expected to take more responsibility for their finances. These challenges are not solely the concern of the regulator – but they do have an impact on how we carry out our work.

Our Business Plan this year reflects this evolving landscape. Technology change represents both an opportunity – in terms of the benefits it can offer consumers – and a threat – in the way it creates opportunities for bad actors beyond our perimeter to scam victims. One of our priorities this year is to turn technology against the criminals to help us tackle financial crime, as well as developing our work on operational resilience to ensure firms have robust systems in place.

One of our priorities this year is to turn technology against the criminals to help us tackle financial crime.

As well as taking on the challenges of the present, we’re also looking ahead. Facing fundamental societal shifts and profound technological change requires us to be the most agile and responsive regulator we can be. So, guided by the Mission and the duty to deliver public value, we have started a debate on the future of UK regulation.

In this next phase of the FCA, our focus will be on transforming our capabilities, our use of technology and our regulatory framework to put us in the best position to deliver our objectives. In an uncertain, fast-changing world, the public look to us to provide more protection to consumers, and to provide it faster. It's clear that risk warnings alone may not be sufficient. So, how we manage the threat of high risk, often unregulated, products will be a real focus in the year ahead.

Travelling between Stratford, Edinburgh and everywhere in-between reminds me of the breadth of our remit and the many consumers we’re here to serve. I’d like to thank the consumers, charities, businesses and firms who’ve given up their time this year to share frank and insightful thoughts on the work we do. The work we do is subject to the highest scrutiny – rightly – and these public meetings are crucial in maintaining transparency around our work.