FCA balances growth, risk, and trust in regulation
Sarah Pritchard, deputy chief executive of the Financial Conduct Authority, outlined the regulator's approach to balancing growth, risk, and trust. Speaking at a Breakfast Briefing, Pritchard detailed how the FCA uses data and technology to foster a fair and thriving financial services market for consumers and the wider economy.
Understanding the regulatory equation
Pritchard emphasized the FCA's strategic framework, guided by its vision to deepen trust, rebalance risk, support growth, and improve lives.
The regulator aims for a fair and thriving financial services market that benefits both consumers and the broader economy.
This vision is underpinned by four key priorities: supporting growth, combating financial crime, assisting consumers, and evolving into a smarter regulatory body.
Now in the second year of its five-year strategy, the FCA maintains consistency while remaining agile, ready to adapt to rapidly shifting markets and emerging threats, particularly those driven by AI.
This principled yet flexible approach ensures that regulation remains relevant and effective amidst constant change, allowing the FCA to proactively address complex challenges like the UK's productivity and growth deficit.
Solving for both variables
The FCA is actively rebalancing risk, recognizing that over-caution can stifle innovation and underserve consumers.
In January 2025, the regulator outlined nearly 50 pro-growth measures to the Prime Minister, encompassing digital innovation, proportionate regulation, easier market entry, and improved capital access.
By December, most were delivered, including the Targeted Support legislation launched in April 2025, which has already approved seven firms and has 23 more in the pipeline.
The FCA also expanded innovation services like the Scale-up Unit and the AI Supercharged sandbox, with a new Climate Scenarios Sandbox cohort planned for later this year.
These initiatives have contributed to London's second global ranking in the Global Financial Centres Index and increased firm confidence in the regulator's growth objectives.
Operational shift, enduring challenge
The FCA's pivot to an operational, data-driven regulator, overseeing 35,000 firms with a lean 5,500-person team, marks a necessary evolution in regulatory efficiency.
While the reported £7 return on every £1 spent is compelling, the true test lies in scaling this impact as 160,000 new entities enter its scope without additional resources.
This ambitious strategy, though promising for targeted harm reduction, demands rigorous, transparent validation to ensure it genuinely fosters market integrity and consumer trust amidst such expansive growth.