How FOS reforms will affect financial services firms
Over recent weeks, the FCA has published a full set of
08/05/26
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What the FCA’s 2026 Regulatory Priorities reports reveal about the direction of supervision
Over recent weeks, the FCA has published a full set of Regulatory Priorities reports spanning nine retail and wholesale sectors. Taken together, they represent a clear shift in how the regulator communicates its expectations – and how it intends to supervise firms in practice.
These reports are not policy updates in the traditional sense. They are designed to replace dozens of individual portfolio letters with a single, annual point of reference for boards and senior management. Across all sectors, the FCA is signalling a move towards more predictable, proportionate supervision – but also a firmer expectation that firms can evidence how their frameworks work in practice. The recurring message is that having policies, controls and governance ‘on paper’ is no longer sufficient. Outcomes, data and demonstrable oversight matter.
Below, we summarise the key themes emerging from each sector‑specific report.
Insurance
The insurance report places renewed emphasis on claims handling, customer understanding and service quality. The FCA is particularly focused on whether firms can evidence good outcomes at the point of claim and across outsourced or delegated arrangements. Oversight, data quality and board‑level confidence in third‑party delivery are central themes, alongside continued scrutiny of governance and fair value under the Consumer Duty.
Consumer investments
For consumer investment firms, the FCA’s priorities centre on building a stronger investment culture, strengthening trust and securing good consumer outcomes. Fair value assessments, financial crime controls and the quality of governance underpinning advice and distribution are firmly in focus. The report is explicit that boards should use it as a guide for self‑assessment and action planning rather than a background reference.
Pensions
The pensions report focuses on helping consumers plan confidently for later life. Value for money, scheme governance and the quality of information provided to consumers are core priorities. The FCA is also signalling increased attention on how firms support decisions at key life stages and how well governance structures deliver consistent outcomes across increasingly complex pension arrangements.
Retail banking
In retail banking, the FCA’s priorities reflect structural change in service delivery. Access to essential banking services, the management of branch closures and digital‑first strategies all intersect with Consumer Duty expectations. The regulator is clear that innovation must not come at the expense of vulnerable customers, operational resilience or effective governance and management information.
Mortgages
The mortgage report acknowledges a relatively resilient market but highlights significant long‑term change, including later‑life borrowing and evolving consumer needs. The FCA’s Mortgage Rule Review sits at the heart of its priorities, with firms expected to engage actively and evidence how lending standards, access and consumer protections are balanced in practice.
Consumer finance
For consumer finance firms access to credit, treatment of customers in difficulty and the quality of forbearance remain key areas in the spotlight. The FCA is challenging firms to consider whether existing affordability and risk assessments unnecessarily exclude consumers and to provide stronger evidence to support them with communications that genuinely meet customers’ needs.
Wholesale buy side
The wholesale buy‑side report is underpinned by a single theme: evidence. Operational resilience, third‑party oversight, and governance are central, with the FCA making clear that it will intervene earlier when firms cannot demonstrate effective control. Innovation is encouraged – but only where accountability and decision‑making are clear.
Wholesale markets
In wholesale markets, the FCA continues to prioritise operational and market resilience, alongside conduct and conflicts management. Boards are expected to engage directly with the priorities and be able to evidence that controls, data and oversight function effectively under stress, not just in steady state.
Payments
The payments report reflects a sector facing rapid innovation and regulatory change. Safeguarding, operational resilience and financial crime prevention sit alongside ongoing Consumer Duty expectations. The FCA is clear that weaknesses in governance or readiness – particularly around third parties – will attract supervisory attention.
Looking across all nine reports, the direction of travel is consistent. The FCA is setting out what it expects, where it will focus and how it will judge firms. For boards and compliance leaders, these reports should be treated less as commentary and more as an agenda for action – forming a baseline for evidence, challenge and prioritisation in the year ahead.
TCC supports boards and compliance leaders across financial services in translating the FCA’s priorities into practical governance, assurance and evidence frameworks that stand up to supervisory scrutiny – as well as helping firms deliver compliance with confidence. This includes reviewing how outcomes are monitored, strengthening oversight of third-party and outsourced arrangements, and ensuring management information enables meaningful challenge and decision-making.
We work alongside leadership teams across cultural and conduct assessment, regulatory due diligence, accountability, operational resilience planning and AI-enabled compliance monitoring, helping firms demonstrate that frameworks operate effectively in practice.
In a supervisory environment increasingly focused on demonstrable control rather than intent, that evidential discipline is becoming a critical part of regulatory confidence as expectations continue to rise.