T
he potential of the UK’s monetary regulator to do its job is ready to come back beneath shut scrutiny in a brand new probe.
The actions of the Financial Conduct Authority , which regulates a swathe of corporations within the sq. mile from High Street Banks to crypto buying and selling apps, are to be reviewed by the National Audit Office in a bid to “examine how the FCA is working with others, particularly HM Treasury .”
The NAO, an unbiased physique which displays the efficiency of presidency operations, mentioned the FCA’s portfolio has swelled in gentle of recent technological improvements like cryptoassets and synthetic intelligence, whereas it additionally needed to cope with a number of recent regulatory regimes in addition to adjust to a statutory goal to “facilitate the international competitiveness” of the UK economic system.
The FCA shall be assessed on the way it plans “take action to meet aspects of the challenges and take advantage of the opportunities posed by recent changes,” the NAO mentioned.
It comes because the Standard revealed final week that regulatory approvals for fintech firms plunged to fresh lows in 2022 in indicators London’s dominant fintech sector was being hammered by a draconian crackdown by the watchdog.
The approval charge of purposes for Electronic Money Institution standing, required for processing digital money funds, fell to only 8% in 2022, figures obtained from FCA by way of a Freedom of Information request present, amounting to only 33 approvals. That compares to an approval charge of 90% in 2018 and a charge of 47% in 2021.
Industry insiders complained that poor staffing and retention ranges on the regulator had exacerbated the autumn in approvals.
Heather Adams, Head of UK Risk at Accenture, mentioned: “The question many regulators globally are grappling with is how to balance a safe and stable financial system and retail consumer needs, with financial innovation and broad protection from harms.
“Concerns around resourcing and talent retention remain recognisable today; the breadth of mandate and objectives, and the capacity to meet them, will likely be an area of focus.”
