The Financial Conduct Authority (FCA) claims it has cut its authorisations backlog by 40% over the last year and is trialling automated application forms.
Following reports of long delays for firms and individuals to be approved by the regulator towards the end of last year, the FCA admitted it had work to do in that department.
In 2020 it took a median average of 144 days to make a decision on insurance advice firm applications, down slightly from 156 days in 2019.
However, the time taken to issue rejections rocketed from 13 months to 17 months.
The FCA has since appointed Laura Dawes and Dominic Cashman as directors of authorisation, reformed its process to speed up decision-making, hired consultants at a cost of more £800,000 and employed almost 100 new staff to tackle the issue.
It appears to be making headway.
Speaking at the Future of UK Financial Services Regulation Summit, FCA executive director for markets Sarah Pritchard said the waiting list had been trimmed by 40%, although she acknowledged there was still more to do.
Pritchard also referred to data showing 20% of applications it received in the last year had been rejected – three times more than the previous 12 months.
“We know we need to do more to speed up some of our decision making,” she said.
“Last year, we made changes to enable us to be quicker and more efficient in stopping harm to consumers and markets. We are focused on speeding up our approach to authorisations, while ensuring it remains robust.
“A strong gateway, making sure that the firms that operate here meet the right standards, is critical in making sure the weeds do not take over.
“Our backlog for pending authorisations has reduced by 40% in the last year. We are trialling automated application forms for companies which are easier to understand and quicker for us to assess.”
Sandbox helped 160 firms
Pritchard (pictured) also revealed that the FCA’s Regulatory Sandbox, which creates a safe space to test regulation around innovative new products – has helped more than 160 firms test their offering, with more than 90% becoming authorised.
“Earlier this year we announced our new and innovative Early and High Growth Oversight approach after pilots showed it helped new businesses grow,” she continued.
“We aim to support 300 newly authorised businesses by next spring and are running webinars to support firms on key issues – such as one on financial promotions in the next few weeks.
“Through this approach we hope to support growth. We will tend seedlings that will thrive, while removing those that won’t – taking early intervention to remove problem firms in this early oversight period.
“As well as supporting new firms, we seek to use our testing approach to identify innovative solutions to reducing harm too,” she added.