FCA Business Plan for 20-21
The Financial Conduct Authority (FCA) recently released it’s Business Plan providing details of their key priorities and activities with particular focus on tackling the Coronavirus (COVID-19) challenge during the year ahead. We discuss the key takeaways below.
On Monday (7th April) the FCA released its latest annual business plan for 2020/2021, which sets out the Authority’s key objectives for the coming year and what they will be focusing on (source).
NorthRow are pleased to see a proactive approach in protecting vulnerable consumers who may be susceptible to the increasing levels of fraud during the COVID-19 pandemic. Managing regulatory and financial crime risks aligns with our mission to provide a safer environment for clients to do business.
Key relevant objectives of the FCA this year include:
- Making payments safe and accessible
- Delivering fair value in a digital age
- Digital transformation of the FCA’s operations
- Enabling effective consumer investment decisions
Here’s how we, as a prominent UK RegTech provider, will be supporting the FCA in achieving their goals for the year ahead
Improving safety within the payments infrastructure
During this exceptional time, where freedom of physical movement in the UK and across most of the world has been restricted, online commerce for both individual and business consumers has increased exponentially. This has increased the requirement to accelerate the drive for many organisations to invest in digital channels to increase online commerce which is predicted to continue long after freedom of movement returns (source).
Personally, as a consumer, I have seen an increase in my own family’s digital spending habits during this period, which has made me more cautious. I’m sure this is the case for many households within the UK as we undertake home-schooling, working from home and the inability to visit many high street retail outlets be it for shopping, fitness or leisure.
Before the pandemic, digital payment infrastructure was used less frequently, however, the drive to move increased activity and transactions online quickly has meant it is vital the move be delivered both rapidly and safely.
The European Banking Authority (EBA) is urging financial firms to pay closer attention to transactions linked to international trade, as the effects of COVID-19 prompt criminal groups to seek new ways of moving illicit funds and goods across borders (source).
Helping the payment industry
As many payment firms have an even greater need to digitally transform their business NorthRow is well placed to support digital customer onboarding and monitoring processes. Whilst it is essential to deliver digital processes in these strange times an added benefit is that digital delivery improves the client experience, increasing operational efficiency whilst also reducing compliance risk.
The NorthRow single-point solution enables clients to onboard both individuals or corporate entities quickly and safely, whilst ensuring the highest level of regulatory obligations are met. NorthRow’s API easily integrates into existing processes and systems and can be deployed within hours, not months, giving customers immediate access to our solution. All customer data and identity information are verified across multiple high-quality and international data sources, helping to reduce the risk of fraud and enabling our client’s to make data-driven decisions about who they can do business with.
As thousands of new merchants join payments infrastructure every day, we are supporting the FCA’s objective by protecting the payments companies, their customers, and the consumers they serve by providing confidence that the actors in the system are who they say they are and are not involved in known criminal activity.
Delivering fair value in a digital age
Fair value for consumers is key to healthy competition and underpins consumer trust in financial services. The FCA will focus on ensuring consumers can choose from a range of financial products and access relevant information to make better-informed buying decisions.
Back in January 2018, Open Banking was created by the UK’s Competition & Markets Authority, for precisely this reason. It was a UK initiative to configure software standards and industry guidelines to drive competition and innovation in UK retail banking. Open Banking allows customers and SMEs to take control of their financial data and share it with organisations other than banks to help get the best product for their needs whilst increasing competition within the financial services market.
Open Banking’s mission aligns perfectly with the FCA’s objective of helping to promote digital innovation and competition to support greater value for consumers. At NorthRow we are proud to be Open Banking’s trusted technology partner in providing digital onboarding, identity verification and ongoing client monitoring services, to ensure the highest levels of security are upheld for this revolutionary initiative.
Drive for digital transformation
What is interesting is that the FCA highlights their own need to focus on digitally transforming their operations to ensure that they have the capabilities and systems they need to provide the best value for money for their services. With the recent pandemic, the need for all organisations to invest in the digital transformation of their processes has been compounded further.
What has become apparent is that businesses that rely on face-to-face meetings to verify their client’s identity before allowing them to use a product or service is a massive barrier to onboarding. In these unusual times, asking your clients to come into an office or branch is no longer viable. Not only do today’s clients desire the convenience of signing up to a product or service in minutes from a mobile phone, but with “social distancing” imperatives, it has become key and that regulated firms need to efficiently respond to this increasingly preferred and socially-acceptable demand for remote onboarding.
We’re delighted that this year’s FCA business plan is focused on value, safety and promotion of digital transformation projects to deliver better value for consumers. We have wanted to see the trend move in this direction, and even more so now, and are pleased that we have ready-made solutions that support the 2020/2021 business objectives from day 1.