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Key Areas of FCA Concern

In 2020, the FCA had planned to shape its work around the areas of greatest potential harm, which were identified in February 2020 in the regulator’s ‘Sector Views’, but as with so many other aspects of life, the impact of coronavirus has meant that the FCA will concentrate on a slimmed down list of priorities over the next three years.

key areas of FCA concern




A reduced focus gives firms the opportunity to prioritise regulatory deadlines and meet the operational challenges that are likely to surface over the next few months, but the FCA are pushing ahead with some work, and understanding what the regulator will focus on and what this will mean in practice for firms is vital for 2021 planning and beyond.

Vulnerable Customers

It will be no surprise to anyone that vulnerability is an ongoing and key focus. The latest guidance consultation was published in late July this year; one of the few non-Covid specific publications to have been made since March. 

Protecting vulnerable consumers is at the top of the FCA’s list, with the regulator stating that the new guidance is “more relevant now than ever”. This serves as a reminder that the fair treatment of vulnerable customers should be a priority – driving strategy and product development, and a key element of training design - and not an afterthought. 

The FCA intend to use the Guidance, once finalised, to apply a ‘vulnerability lens’ to other work and in their monitoring of firms’ treatment of customers. It can be difficult to know how to apply the Guidance to business, however, as the document doesn’t provide much in the way of specific recommendations; it has been designed to avoid the tick-box approach, which can leave firms feeling uncertain about how to put the document into practice. However, the Guidance does give firms a clear vision about where the FCA are going with fair treatment of vulnerable customers. Taking steps to embed fair treatment within the firm’s culture, policies and processes will help to assure the regulator and potentially avoid action.

Importantly, the Guidance also applies to outsourced functions – meaning that firms will have to cover treatment of vulnerable customers in their due diligence and audit processes.

The updated document takes into account a lack of clarity from some respondents on the draft issue of ‘potential’ and ‘actual’ vulnerability, with some arguing the distinction was redundant, given that the FCA have defined vulnerability as being at greater risk of harm. While the regulator has confirmed it intends to move away from the definitions and instead recommends viewing vulnerability as a spectrum, the impact on firms remains that they must train their staff to be able to identify vulnerability across the spectrum, and to be able to offer appropriate support. 

Financial Difficulties

Financial difficulties remains an ongoing focus, both as part of the FCA’s direct response to coronavirus, and in their continuing thematic work. One of their key priorities over the next three years is ‘ensuring consumer credit markets work well’, including working to ensure that firms identify consumers at risk of financial difficulties at an early stage, and enable those consumers to take control of their debt before it becomes a problem.

Safe and Accessible Payments

Making payments safe and accessible is another main focus. The FCA are concerned that both rapid development in payment services and the coronavirus does not adversely impact consumers’ safe access to cash and payments services. 

It will expect firms to ensure that they handle and store data correctly, with the regulator taking a renewed focus on firms’ systems and controls, particularly in relation to fraud, money laundering and other financial crime and the ability to detect and reduce the risk of financial crime. This theme continues in the FCA’s cross-cutting work, with the intention to strengthen rules to prevent money laundering, and working with other stakeholders to develop a joined-up approach to cryptoassets.

The changes to the FCA’s approach to reducing financial crime are designed to work in line with their commitments in the UK’s 2019 National Economic Crime Plan. They published a consultation on extending the Financial Crime Data Return to more firms to strengthen their supervision as part of their AML strategy on 24 August 2020. Currently, around 2500 firms submit the reporting information, but the new proposal would extend that obligation to any firm the FCA considers potentially poses a higher money laundering risk, as well as authorised firms within the scope of MLRs that hold client money or assets, most payments institutions, all electronic money institutions, MTFs, OTFs and all crypotasset exchange providers. 

And while the FCA are keen to increase consumer awareness around scams – particularly given the opportunities that Covid-19 has given to scammers – the regulator is also investigating 165 suspected Covid-19 related scams affecting financial services firms, including efforts to steal the logins of HSBC business customers. The increase in opportunistic scams coming at a time the FCA is increasing its focus on firms’ anti-financial crime systems serves to highlight the importance of ensuring systems and controls are fit for purpose and staff are well trained to spot potential activity.

Our range of online training covers a range of themes high on the FCA’s agenda this year. Our Fair Treatment of Vulnerable Customers course covers how to identify and speak to vulnerable customers in practice, recording vulnerability and appropriate support options.


Our Information Security and Data Protection course takes candidates through the background they need to know to be able to recognise potential threats and what to do if one is discovered.

All of our courses are accessible online and use a mix of videos, slides and graphics to embed what the learners need to know.


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