The Financial Conduct Authority (FCA) is barely meeting half of its service level targets after another worsening performance in the last financial year.
The regulator met its service level agreement (SLA) targets on just 51% of its metrics for the 2021/22 financial year – down from 55% in the 2020/21 financial year.
Furthermore the FCA’s annual report revealed it was failing to even meet minimum targets for 30% of its metrics, compared to 25% in the previous year.
It appears the areas with most success were consumer-facing while operations for the financial services industry are still suffering worst.
Several areas were highlighted in the report in which the FCA admitted it needs to improve. These include:
- Answering telephone calls to the Supervision Hub. The FCA aims for no more than 5% of unanswered telephone calls from firms or consumers. Although it met this voluntary target for consumers, it was missed for firms for a second consecutive year. This was attributed to significant spikes in firm call volumes because of activities including migration to new reporting and invoicing systems, firm attestations being required for Financial Services Register data and queries about Covid-related surveys.
- Responding to Freedom of Information Act (FOIA) requests within the statutory timeframe of 20 working days. The FCA completed 67% of FOIA requests against its target of 90%. The FCA conceded this is below the standards it expects of itself but added it expects to meet its target operating service metrics during 2022/23.
- Achieving its timeframe for subject access requests for information made under General Data Protection Regulation. The FCA operates to a target of 90% for data protection requests completed within the one month timeframe but in 2021/22 it responded to 44% of requests within this period. The prolonged dispersed working combined with significant team absences has had a substantial impact on performance and contributed to delays. It has invested in recruitment, is looking at further technological improvements and it expects to meet the target operating service metric during 2022/23.
- The time taken to process appointed representative notifications within five days of the request. It processed notifications within the five-day voluntary target 44.7% of the time, which is below the target and lower than last year’s 48.1%.
- Meeting its target for commenting on subsequent proofs of documents submitted for pre-vetting by new applicants/unlisted issuers undertaking public offers and preparing prospectuses for the first time. There was a decline in adherence seen in previous years. This was due to a large increase in submission volumes. In 2020/21 it responded to 642 submissions for new applicants, whereas in 2021/22, the number was 1,108, up 73%.
However, there were some areas in which the FCA said it had made improvements when compared to last year. These include:
- Replying to 66.4% of MPs letters within 15 days, up from 28.4% in 2020/21. The regulator also improved the number of MPs letters replied to within 20 days by 36 percentage points from last year (from 50.1% to 86.2%).
- Providing a response to consumer correspondence from email/web form/webchat within two working days 87.8% of the time, up from 80.4% last year.
- Closing 170% more complaints in 2021/22 than the previous year. The FCA closed 2,211 cases in 2021/22 compared to 820 closures in 2020/21. This included complaints about its regulation of London Capital & Finance (LCF). The FCA also acknowledged 93.7% of complaints within five working days of receipt, compared to 65.7% in 2020/21.
- Achieving the SLA target for processing complete applications for registration under the Payment Services Regulations within three months with 97.6% for the first time in three years.
- The FCA’s enforcement team has obtained a range of outcomes this year, protecting consumers, and market integrity. This includes imposing £313m in financial penalties on firms and individuals for breaching our rules, an increase from previous years. This figure excludes the £264.8m that Natwest was fined for failing to comply with the money laundering regulations 2007 as this was a criminal case and the financial penalty was therefore imposed by the court. The FCA currently has 603 investigations open, looking at issues such as market abuse and investment scams.