The Financial Conduct Authority (FCA) is prepared to be much more aggressive in taking legal action against firms and individuals it believes are acting improperly in the financial services sector.
The regulator said it was prepared to expand its legal work even if it meant losing more cases as this would help provide certainty to the industry.
FCA CEO Nikhil Rathi (pictured) also revealed that Google was the business he had most frequently met during his first year in the position as part of addressing financial scams advertised online.
Speaking at the Lord Mayor’s City Banquet in London this week, Rathi said: “It may surprise you to know the firm that I have met most so far as FCA CEO is not a purely financial services firm, but is in fact Google, the main topic of discussion being online safety for retail financial services consumers, one of many challenges that requires a joined-up approach.”
Discussing the regulator’s bolder approach to enforcement and legal action, Rathi said: “We have often been criticised for acting slowly or with too much risk aversion. This is changing.
“We are applying a bolder risk appetite in dealing with serious misconduct, including, as you will have seen, using criminal powers in the most serious cases involving financial crime or money laundering.
“We will litigate more if we need to, recognising we won’t win every aspect of every case but also appreciating that legal certainty can provide considerable benefits for industry as well.”
Data and digital focus
Rathi also outlined the FCA’s intentions to become more data and digital focused, noting that it was spending £120m over three years to maximise its move to cloud technologies.
This will include hiring “significantly more” data scientists and data analysts as it expands into a new Leeds office.
And he aims to reduce the burden on regulatory reporting for firms: “Regulatory reports are estimated to cost between £1.5bn to £4bn a year, with 20,000 rules across 58,000 firms,” Rathi continued.
“That’s why we’re working with the Bank of England on the Digital Regulatory Reporting Initiative.
“By connecting to firms through blockchain and application programming interface (API) technology and implementing machine readable and executable regulation, compliance checks can be completed in near real time.”