The Financial Conduct Authority has supported and driven innovation in financial services firms since it was established. As a regulator, we need to both respond to how firms are using new technology, data and analysis and to look at how we can apply these to improve our own efficiency and effectiveness.
Our 2022 data strategy update explains how we’ve achieved our 2020 commitments to make better use of data, spot and stop harm faster and invest in our people, technology and culture. Additionally, it sets out our continued transformation journey towards becoming a digital and intelligence led regulator.
Our first data strategy, published in 2013, focused on how we collect and manage data. It served us well, particularly in how we minimise the burden of data collection on firms. However, technology and advanced analytics techniques have evolved significantly over the last 6 years. We now need a strategy that helps us focus on how we can use new capabilities that are available. This will deliver a transformation in how we work and help deliver our Mission.
We need to build the right skills, make available new technologies and embed a culture that encourages innovative thinking across the organisation. This will bring us direct benefits, but also allow us to better understand how increasing capabilities are affecting the firms we are regulating.
Our strategy outlines how we intend to do this and the outcomes we want to achieve.
The aims of this strategy
We want to be smarter in the way we use our data and advanced analytics to transform the way we regulate and reduce the burden on firms. This will allow us to:
- review historical data and assess where harm has occurred to learn lessons for the future
- improve the way we use intelligence to better understand harm, and manage it more swiftly
- improve our use of predictive analytics by spotting patterns and trends across firms, business models, and sectors, ensuring we can identify harm and intervene quickly
- strengthen our analytics capabilities, to help our decision-making and help us set priorities
- share data more effectively and streamline work across the FCA to make us more efficient
Why we are making this change
Advances in technology and improvements in data analytics, have begun to change the way we manage and use data. The knowledge and skills that we have gained supports all areas of our work.
There are more regulated firms using advanced techniques in their business, and we need to understand them to regulate them effectively.
Finally, we are regulating an ever increasing number of firms. This means we must do more with the same resources. We have a duty to regulate and deliver value for money. Automation and data-driven approaches are essential to our approach.
The outcomes this strategy will deliver
Our vision is to harness the power of data and advanced analytics to support our Mission, to make us more efficient and effective, and to ultimately transform how we carry out financial regulation in the UK.
We know that our capabilities will evolve at different speeds, and new priorities will arrive that we cannot foresee today. But our objective is to deliver real change over the next 5 years by 2024:
Deepen our understanding of markets and consumers
- We will have the ability to simulate policy outcomes using automation and analysis to improve the way we regulate.
- We improve our regulatory activities by using advanced data analysis techniques to identify where we need to intervene.
- We will publish FCA data to allow firms to simulate and test new products and business models.
- We will improve our active scanning of regulated firms and market infrastructure.
- We will be able to use predictive models of harm, supporting the efficient allocation of our resources and effort.
Swiftly identify, connect and react to firm and market issues
- We will carry out better monitoring of harm, improving our analysis and data sources to detect and prevent misconduct.
- Our Digital Regulatory Reporting (DRR) project is a joint initiative between the FCA and Bank of England to make regulatory reporting more efficient and effective.
- Our use of data analytics will proactively identify harm in the market, and we will use automation to act more quickly.
- We will automate repeatable manual processes.
Build a flexible and fit-for-the-future organisation
- All data is managed better.
- We attract the best talent. Provide training and development to support all staff. Increasing the basic level of understanding of data and analytics concepts.
- We are an employer of choice and an attractive workplace for digital, analytics and STEM (science, technology, engineering and mathematic) skills.
- New capabilities and culture allows us to be flexible to changing environments and priorities.
- We are recognised as being best in class for our capabilities and skills in data and analytics.
- We embed Data Science across the organisation.
- We are agile and able to respond and apply new technologies and techniques.
- We can reallocate resources quickly, when we need to.
How we will achieve these aims
Our Data Strategy will be delivered via an ambitious portfolio of work over the next five years. This will provide coordination across all data related projects and day-to-day activities.
The portfolio is structured around the following areas:
- Projects and Key Business Initiatives in every single division that exploit our capabilities and ways of working to bring benefit to us all.
- Changes to our culture and skills to provide the environment, training and recognition for all employees to identify and champion opportunities to fully exploit data and deliver improvements in their areas.
- A new FCA data operating model that provides central capabilities and services to push forward our transformation, while growing data and analytical capability throughout the organisation.
- Improved Central Data Services that support our governance, control and supply of data and enable us to make better use of it by providing support across a range of disciplines.
- New Data Management and Analytical tools to give us control, flexibility and power in the way that we use our data.
- Core enabling technology platforms giving us the foundational technologies and infrastructure to fully harness the power of data.
As we deliver key initiatives and projects, we will constantly review our benefits, map them against our outcomes, and formally assess our progress at key stages.
Our next steps
We are two and half years into a five year programme of work. Our next steps include:
- Scaling our data and analytics tools and capabilities. Recruiting more data and analytics roles and introducing data literacy training for all employees.
- Working with the Bank of England and industry on the next use cases for the Transforming Data Collections Programme, as well as implementing a streamlined version of the financial resilience survey onto our RegData platform.
- Creating foundations for enterprise wide digital intelligence by focusing on our case management and triage processes.
- Ingesting new sources of data into our data lake to enable faster insights on potential harm.
- Reviewing the results from sanctions screening and consider its application to other financial crime controls.
- Continuing to host collaborations with industry to understand the latest developments in regulatory and supervisory technology.
Find out more in our Data strategy 2022 update.