Top 10 regulatory priorities for 2026

What happened?

As financial services firms consider what lies ahead for them in 2026, the FCA’s priorities for 2025–2030 continue to emphasise the delicate balance between supporting growth and ensuring firms “do the right thing.”

The FCA’s five-year strategy, set out in March 2025, is anchored in four areas: being a smarter, more efficient regulator; supporting growth and innovation; helping customers navigate their financial lives; and combating financial crime. Regulatory efficiency and proportionality remain front and centre: firms that seek to do the right thing can expect streamlined reporting, simplified authorisation and reduced data requests – with 36,000 firms already benefiting from lighter reporting obligations.

In a recent letter to Prime Minister Keir Starmer, FCA CEO Nikhil Rathi highlighted the regulator’s focus on enabling sustainable financial growth, supporting digital innovation and promoting financial inclusion – all while protecting consumers and safeguarding market integrity.

Against this backdrop, financial services firms are operating under a more pro-growth regulatory approach, with reduced reporting burdens, fewer formal enforcement actions but continued supervisory scrutiny. The FCA is placing greater reliance on data requests as a tool for supervision and asking firms to evidence how they are delivering good outcomes for customers, fighting financial crime and demonstrating effective governance and risk management whilst continuing to deliver value for customers.

We’ve grouped our top ten priorities into four key topics: current themes, emerging opportunities, ongoing issues and areas to watch. Together, these highlight where firms should focus in 2026 to meet FCA expectations, manage risk effectively and deliver lasting value for customers.

Why does it matter?

Current themes

1. Embedding and monitoring the Consumer Duty

What’s changing

The FCA continues to prioritise embedding the Consumer Duty across all sectors, using it as the primary mechanism to drive good outcomes rather than introducing prescriptive rules. The regulator’s plan for multi-firm reviews will examine how the Duty is being embedded with a focus on outcome monitoring, product design, customer journey mapping and consumer understanding. For example, in the consumer investment sector, the FCA is conducting a market-wide review of the implementation of the Duty in model portfolio services. The treatment of vulnerable customers also remains of regulatory importance. As part of a streamlined complaints reporting process, the FCA now requires firms to report complaints involving vulnerable customers and is working with the Information Commissioner’s Office (ICO) to address the challenges of supporting such customers while complying with data protection requirements.

Why it matters now

Embedding the Consumer Duty well is crucial for protecting customers, improving engagement and ensuring delivery of fair value – particularly for vulnerable clients. Regulatory scrutiny is intensifying, with the FCA expecting firms to evidence how they assess and monitor outcomes, design products responsibly and communicate effectively with consumers. Despite a reduced number of S166s the FCA is increasing its use of information requests as a supervisory tool. Consistent alignment is key to gaining a competitive advantage of fostering trust and transparency.

Where firms typically struggle

Firms can often find it challenging to translate high-level Consumer Duty requirements into operational practice. Common issues include inconsistent monitoring of customer outcomes, fragmented ownership of product governance, gaps in customer journey design and poor identification of vulnerable clients. These gaps can lead to compliance risks and missed opportunities to improve customer outcomes.

How TCC and Recordsure can help

TCC’s experts work with firms to embed the Consumer Duty’s principles into their governance, culture and business model, which, in turn, helps create a clear, auditable framework for monitoring customer outcomes. Recordsure’s AI-led technology complements this by capturing and evidencing client interactions, enabling firms to demonstrate regulatory compliance efficiently and confidently, whilst keeping customer outcomes at the heart of the firm’s operations.

2. Tech, data and innovation

What’s changing

The FCA is pursuing a five-year strategy focused on supporting growth, improving consumer outcomes and becoming a “smarter regulator” through digitalisation, streamlined authorisations and more efficient supervision. As digital transformation accelerates, firms are increasingly embedding new technologies such as AI, data analytics and digital identity solutions. Regulatory expectations are evolving to ensure these innovations are deployed safely, whilst the FCA invests in its own technology, people and systems.

Why it matters now

Firms are expected to ensure that any AI and data-driven tools they use are explainable, unbiased and aligned with customer outcomes, whilst maintaining robust oversight of vendors and models. Responsible use of AI is fast becoming a priority – firms and technology vendors should be deploying the highest AI principles to ensure safety, security, ethical responsibility and accountability. The FCA’s focus on smarter regulation means firms that don’t manage technology and data risks effectively may face increased scrutiny and enforcement action.

Where firms typically struggle

Many firms struggle with embedding emerging technology safely and at scale. Common challenges include implementing effective data governance, monitoring risk and maintaining compliance with data protection requirements. These gaps can increase operational, reputational and regulatory risk.

How TCC and Recordsure can help

TCC and Recordsure combine smart people and innovative technology to help firms navigate regulatory complexity, strengthen compliance and unlock lasting value. TCC embeds governance and operational frameworks for safe innovation, while Recordsure’s AI captures and analyses client interactions at scale, helping firms monitor outcomes, manage risk and demonstrate compliance.

3. Motor finance redress scheme

What’s changing

The FCA is progressing its work on motor finance following concerns about historical discretionary commission arrangements (DCAs) and has paused handling certain motor finance complaints while the regulatory and legal position is clarified. Firms are expected to retain relevant records, respond to FCA data requests and prepare for an industry-wide redress scheme. The regulator has made it clear that operational readiness, data integrity and governance will be critical when the scheme is introduced. 

Why it matters now

Motor finance redress presents significant financial, operational and reputational risk. Firms that delay preparation risk being unable to respond quickly and effectively to large volumes of complaints, regulatory information requests and potential redress activity. The FCA’s intervention in complaints handling underscores its expectation that firms act proactively to protect customer outcomes and maintain trust, even while final decisions are pending. 

Where firms typically struggle

Many firms face challenges with fragmented or incomplete historical data, inconsistent documentation of commission arrangements and limited visibility over past customer journeys. Scaling complaints handling, responding to regulatory data requests and evidencing fair treatment can strain existing operations. Weak governance, unclear ownership and insufficient management information further increase execution and regulatory risk. 

How TCC and Recordsure can help

At TCC Group, together with our Momenta brand, we combine deep expertise with years of experience delivering innovative solutions that help firms execute proposed redress schemes efficiently and at pace. We support clients in preparing and validating existing plans and go further by partnering to build robust processes and solutions that ensure long-term compliance and resilience. 

Emerging opportunites

4. Targeted support

What’s changing

Following a joint review with the government and two consultation papers, the FCA has published its policy statement and near-final rules for the new targeted support regime. The framework aims to bridge the gap between guidance and advice for pensions and retail investments, addressing the needs of an estimated 7 million UK adults with significant cash savings who may be missing out on investment opportunities. Firms can apply for FCA permissions to deliver targeted support from March 2026, ahead of the regime’s planned implementation on the 6th of April 2026, subject to legislation. Some firms are already engaging with the FCA’s pre-application support service.

Why it matters now

With only a small fraction of consumers accessing regulated financial advice, many savers and investors remain unsupported at crucial decision points. The new targeted support regime presents a potential area for growth for firms – particularly product providers and those new to the market – and reflects the political agenda to encourage investment. It aims to enable customers to make informed decisions, a core part of the cross-cutting rules, with guidance on how to receive better returns on their cash savings, as well as supporting those who are not saving enough for retirement.

5. Simplification of insurance rules

What’s changing

The FCA has finalised its simplified insurance rules and plans further review to give insurance firms more “flexibility and responsibility”. Key changes include giving firms the flexibility to set product review frequency, moving from annual reviews per product to risk-based reviews, and removing the 15-hour continuing professional development (CPD) requirement for staff. The regulator also intends to remove three further insurance data returns, reassess eligibility and disclosure requirements for packaged bank accounts, streamline collective investment rules and remove handbook references that are no longer needed under the Consumer Duty.

Why it matters now

Simplified rules will enable firms to reduce compliance costs and focus resources where they are most needed. By reducing regulatory burdens, insurers can strengthen their competitive position.

6. Governance – non-financial misconduct

What’s changing

The FCA has long warned that a firm’s handling of non-financial misconduct is a key indicator of its culture. It has now issued much-anticipated guidance on how firms should interpret non-financial misconduct within its Conduct Rules and within firms required annual assessment of an employee’s fitness and propriety (F&P). The guidance clarifies that behaviours such as bullying and harassment can constitute breaches of fundamental principles. Starting in September 2026, it will also introduce minimum standards of behaviour for employees across financial services and outline the factors that should be considered when assessing their F&P.

Why it matters now

Non-financial misconduct is an increasingly high-profile area under regulatory scrutiny, and poorly managed misconduct is a clear sign of weak governance. The regulator’s message is unmistakable: how a firm handles non-financial misconduct reflects its culture. Poor culture harms not just consumers and employees but also markets and a firm’s bottom line. The FCA is now actively prioritising this issue through its supervision of firms and senior managers, so taking a proactive approach to address it will give firms a clear advantage.

Ongoing issues

7. Financial crime and market integrity

What’s changing

The FCA continues to prioritise the detection and prevention of financial crime, including money laundering, fraud and market abuse. Its 2025–30 strategy highlights the increasing complexity of digital payments, fintech innovation and emerging financial crime threats, emphasising that firms must implement robust, adaptable and risk-based controls. The recent £44m fine against Nationwide for failures in anti-financial crime systems underscores the regulator’s focus on firms’ ability to maintain accurate know-your-customer information, monitor transactions effectively and respond promptly to emerging risks. Firms are expected to strengthen oversight, embed accountability and proactively identify high-risk customers and activities.

Why it matters now

Financial crime risks can expose firms to regulatory breaches, significant financial losses, reputational damage and the erosion of consumer trust. With rapid growth in digital channels and payment methods, the FCA expects firms to move beyond static compliance checklists to implement proactive, adaptable and fully integrated financial crime controls.

Where firms typically struggle

Common challenges include embedding effective financial crime frameworks across the business, maintaining clear accountability, conducting comprehensive risk assessments, monitoring third parties and appointed representatives, and keeping pace with evolving threats. Financial crime is no longer a static threat – with the increasing presence of fintech products, instant payments and AI-driven fraud, firms need to rethink their fraud prevention strategy to protect customers in real-time digital world. Firms also often struggle to capture complete evidence and provide senior management with sufficient oversight for informed decision-making and regulatory reporting.

How TCC and Recordsure can help

TCC’s team of practitioners and ex-regulators can help firms design, implement and embed compliance frameworks that ensure risk assessments, monitoring processes and senior management oversight meet the FCA’s expectations. When combined with Recordsure’s AI, which captures and analyses interactions, firms gain a clear audit trail, enhanced monitoring capabilities, and the confidence to manage compliance risks effectively.

8. Data privacy and cyber risk integration

What’s changing

The FCA has signalled that operational resilience must go beyond compliance frameworks to address how firms actually protect client data and respond to cyber threats. Its focus is expanding to include data privacy, cyber security controls, incident reporting and the resilience of third-party and vendor ecosystems. As firms become more digital and interconnected, the regulator expects closer integration among operational resilience, cyber security and data governance – rather than treating them as separate disciplines.

Why it matters now

Cyber incidents, data breaches and third-party failures can cause immediate and widespread harm to customers and markets, as seen in numerous high-profile incidents in 2025. The FCA increasingly expects firms to demonstrate that data protection and cyber risk are embedded in their resilience planning with clear escalation, testing and response mechanisms in place.

Areas to watch

9. ESG compliance

What’s changing

The FCA is increasing its focus on ESG and sustainable finance, emphasising accurate disclosures, robust governance and strong controls. The December 2025 Regulatory Initiatives Grid highlights key upcoming measures, including Sustainability Disclosure Requirements (SDRs), oversight of ESG rating providers and alignment with the UK Sustainability Reporting Standards. Firms are expected to ensure ESG considerations are fully embedded in product design, distribution and ongoing oversight, supported by reliable data and transparent governance.

Why it matters now

As demand for sustainable products grows, the FCA is signalling that claims must be transparent, substantiated and aligned with emerging regulatory standards. Firms that fail to meet these expectations risk undermining consumer trust, attracting regulatory scrutiny and harming market integrity. The next two years will see implementation milestones for SDR, ESG rating regulations and sustainability reporting, making proactive compliance essential.

10. Ongoing advice services

What’s changing

The FCA is reviewing how ongoing financial advice is delivered, including a potential removal of the annual suitability requirement for advice clients. This was signalled by the FCA when it published the findings of its review of ongoing financial advice services earlier this year. We are expecting the FCA to clarify its position in H1 2026.

Why it matters now

With changes to the annual suitability requirement under consideration, firms must ensure that they can continue to demonstrate that clients receive timely, appropriate advice. Clear evidence of ongoing oversight and engagement is critical to protecting clients, managing regulatory expectations and maintaining trust. Failure to meet these standards could lead to customer harm, complaints or regulatory scrutiny.

Where firms typically struggle

Firms often struggle to consistently demonstrate ongoing suitability, particularly when record-keeping and monitoring processes are fragmented. Challenges include tracking changes in client circumstances, aligning advice with evolving client objectives and ensuring that communications and recommendations are documented effectively.

How TCC and Recordsure can help

TCC helps firms embed governance, workflows and monitoring processes to ensure that ongoing advice is consistently suitable, client-focused and fully auditable. Recordsure’s AI captures client interactions and key decisions, creating a clear, evidence-based record that demonstrates regulatory compliance and supports firms in delivering high-quality, transparent advice.

Who is affected?

These priorities affect firms across wealth management, pensions, banking, lending, payments, insurance and motor finance, particularly those with consumer credit or motor finance books, product providers considering targeted support, and any firm embedding AI or data-driven tools into customer-facing processes.

Key risks

Consumer Duty: inconsistent monitoring of outcomes, fragmented product governance and poor identification of vulnerable customers.
Technology and AI: data governance gaps and insufficiently explainable or overseen AI and data-driven tools.
Motor finance redress: fragmented historical data, inconsistent documentation of commission arrangements and weak governance ahead of a redress scheme.
Targeted support: firms new to the regime risk being unprepared for the permissions process opening from March 2026.

Actions to take

Embed Consumer Duty principles into governance, culture and business model to create an auditable framework for monitoring outcomes.
Review AI and data-driven tools for explainability, bias and vendor oversight ahead of increased FCA scrutiny.
Retain and organise historical motor finance records and prepare complaints-handling capacity for a potential redress scheme.
Consider whether to apply for FCA permissions to deliver targeted support ahead of the regime’s planned start in April 2026.

Wider implications

The FCA’s own account of its priorities extends beyond the four themes covered here to further areas the regulator is watching, including simplification of insurance rules, governance and non-financial misconduct, financial crime and market integrity, data privacy and cyber risk, ESG compliance and ongoing advice services. Together, the ten priorities point to a regulator that is easing some reporting burdens while sharpening its focus on evidenced outcomes.

Firms that treat 2026 planning as an opportunity to strengthen governance and evidencing, rather than simply reduce reporting effort, are likely to be better placed as supervisory data requests increase.

Recommendations

TCC and Recordsure combine advisory expertise with technology to help firms embed governance and operational frameworks for safe innovation, while Recordsure’s AI captures and analyses client interactions at scale to help monitor outcomes and evidence compliance.

On motor finance specifically, TCC Group works alongside its Momenta brand to help clients prepare, validate and execute redress plans efficiently and at pace.

Frequently asked questions

What are the FCA's four strategic aims for 2025-2030?

Becoming a smarter, more efficient regulator; supporting growth and innovation; helping customers navigate their financial lives; and combating financial crime.

How many regulatory priorities does TCC identify for 2026?

Ten, grouped under current themes, emerging opportunities, ongoing issues and areas to watch.

When does the new targeted support regime take effect?

Firms can apply for permissions from March 2026, ahead of a planned start on 6 April 2026, subject to legislation.

Why has the FCA paused some motor finance complaints?

To clarify the regulatory and legal position on historical discretionary commission arrangements before an industry-wide redress scheme is introduced.

Reviewed by TCC Group Editorial Team September 16, 2026

Top ten regulatory priorities for financial services firms in 2026

What happened?

Why does it matter?

Who is affected?

Key risks

Actions to take

Wider implications

Recommendations

Frequently asked questions

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