The Financial Conduct Authority (FCA) is making the most of data and intelligence as a means to find out which financial advisers are more likely to deliver poor advice, the regulator has said.
Delivering a speech to the CDO Exchange for Financial Services, FCA chief data, information and intelligence office Jessica Rusu, revealed the regulator is using the data and intelligence it collects to anticipate and predict harm.
“We regulate over 51 thousand firms – including thousands of small firms – and the data we collect from them helps us to understand, prioritise, and intervene more effectively than ever before,” Rusu said.
“Connecting these different data sets is helping form new intelligence and prioritise risks. For example, we are identifying financial advisers most likely to give poor advice by tracking the outcomes from previous supervisory activity.”
Rusu explained that the FCA’s aim is to define and codify what it calls ‘paths to harm’ – the behaviours and events likely to end in consumer harm or markets failing to function.
“For example, we know the conditions that might give firms an incentive to pursue aggressive selling practices. And we know the tactics a fraudulent seller might adopt before going on to set up a fraudulent investment programme.
“When we have the data in a shape which will let us see when those conditions are being met, we can intervene earlier – before consumers and markets suffer. It will mean a greater focus on prevention than ever before.”
Rusu added that the FCA’s drive to become a data led regulator has led to profound changes in the way it works.
“For the industry to function at its best, we have to function at our best. We have the highest expectations for business, and we set the same standard for ourselves,” she continued.
“We’re making a huge investment in our own capabilities – the way we collect data, the way we use it, and the way we turn it into interventions at scale. We’ll be saying more about this in a refreshed data strategy soon.”
Early last month, the FCA revealed that as it has become increasing data led, roles have opened up providing opportunities for neurodiverse individuals.
