Strategic Clarity and Supervisory Confidence

A Fair Warning on the FCA’s 2025–2030 Strategy

Executive Summary

This white paper captures the perspectives of compliance and finance professionals from UK investment and capital markets firms in response to the FCA’s 2025–2030 Strategy. Insights were drawn from a series of structured confidential interviews led by Ellis Wilson. The paper reflects lived experience and operational realities — not formal consensus or representative polling — and aims to provide an authentic insight into perceptions of the FCA’s strategy.

Interviewees broadly supported the strategic aims outlined by the FCA. The emphasis on reducing harm, supporting innovation for growth, and enabling competitiveness were all welcomed. However, multiple participants raised concerns about inconsistent supervisory tone, the operational burden on smaller firms, and uncertainty around how strategy would translate into day-to-day supervision.

Despite that, the white paper surfaces positive engagement stories, constructive solutions, and practical suggestions. Many participants shared how regulatory interactions had improved over time or where the FCA had adapted in response to dialogue.

The paper is structured around five strategic themes aligned to the FCA’s published plan. Each includes insights that reflect both challenge and opportunity — and in several areas, practical proposals for recalibration.

1. Rebalancing Risk & Innovation

Participants welcomed the FCA’s acknowledgement that risk must be better balanced with innovation. However, few believed this principle had yet filtered into operational supervision. There was a widespread sense that FCA staff were still cautious in practice — particularly where proposals fell outside established precedent.

Several participants noted that even when policy teams signal openness to new approaches, supervisory interpretation seems to revert to default caution. The experience of attempting new digital journeys, permissions processes, or fund structures still felt difficult to navigate. Where firms took initiative to challenge perceived inconsistencies, the process was described as slow and often uncertain. Where FCA approval was commercially sensitive, the slow regulatory pace was perceived as obstructive and expensive.

Some attributed this gap to a lack of confidence and experience among FCA staff to act consistent with the strategy. Others believed it reflected a structural challenge: the FCA wants to support innovation, but existing frameworks don’t reward early adoption, experimentation or balanced practicality — especially where risk cannot be precisely modelled or managed within commercial realities.

There was, however, recognition that innovation itself brings real risk, and that the FCA is right to maintain public confidence as its anchor. Participants did not expect “free passes” — but did express a desire for greater clarity about acceptable boundaries, faster feedback loops, and supportive approval structures that help firms act decisively.

2. Supporting Growth and Digital Transformation

Firms saw alignment between their strategic priorities and the FCA’s stated support for growth, innovation, and digital supervision. Several spoke of the opportunity to extend access to financial services through digital-first models — particularly for underserved demographics or younger investors.

Multiple participants highlighted that current permissions processes and supervisory practices often disincentivise business growth. Delays in approvals, shifting expectations, or inconsistent feedback were described as real barriers. For investment firms aiming to deploy capital quickly, long wait times or retrospective challenges had tangible cost impacts.

More than one interviewee commented that younger customers are bypassing traditional advice altogether. They expect personalised, intuitive, digital-first experiences — and if regulation limits firms from offering those journeys, the risk is not just commercial, but generational. The industry could lose the trust of an entire cohort of future investors if it fails to adapt.

At the same time, participants acknowledged the regulator’s role in ensuring fair outcomes and protecting consumers in novel or lightly tested models. The concern was not with the principle of oversight — but with the friction, inconsistency, and slowness of regulatory adaptation. Faster, clearer engagement, better clarity on evolving regulatory concerns, and mechanisms for contextual information sharing were all suggested.

3. Compliance, Governance & Resourcing

Most firms accepted the FCA’s increased focus on governance and senior accountability. However, some felt the regulator had underestimated the operational burden of implementing new requirements — particularly for mid-sized firms that lack the internal resources of global banks.

There was a common view that meeting recent regulatory expectations around culture, conduct, and non-financial misconduct in a way that satisfied regulators and maintained internal compliance was difficult.

Some interviewees observed that while the SMCR regime had helped clarify individual accountability and behavioural expectations, the practical demands of implementation — particularly the depth and documentation required for senior manager approvals — could be disproportionately resource-intensive. There was also concern raised that expectations around culture and conduct could impact senior management appointments in the UK for groups investing in the UK.

Several participants described the recruitment and retention of compliance professionals as increasingly difficult — particularly in smaller firms, where expertise is expensive and bandwidth is limited. Rising expectations and heightened accountability have made the role more pressured, while continued ambiguity in regulatory interpretation leaves little margin for error. The result is a function that is both essential and exposed — especially if the burden is shouldered in isolation. As one participant observed, it is critical that senior leadership take responsibility for understanding how and where regulatory concerns manifest within the business model, and actively lead the management and control of those risks.

Despite these challenges, some firms reported positive engagement with supervisors on governance matters, including productive feedback and a shared commitment to improved standards. But most agreed that more predictable, non-confrontational engagement would be helpful, with a few still nostalgic for the loss of direct access to a supervisory team.

4. Data, Technology and Compliance Capability

Most participants accepted that the future of regulation would be increasingly data-driven. Several welcomed the potential of smarter regulatory tools — including AI — to support oversight. However, some expressed doubts that the FCA’s stated intent to prioritise higher-impact firms is yet reflected in a clearly differentiated supervisory approach, particularly for mid-sized and smaller firms.

Firms cited rising volumes of granular data requests, often unaccompanied by clear rationale. Several noted that requests seemed reactive or duplicative — with little sign of integrated data architecture or consolidated analytics within the regulator. Others observed that smaller firms are expected to maintain enterprise-grade data infrastructure without corresponding resources or clarity. Something firms are experiencing through the FCA’s wider use of Section 165 information requests that spotlights the potential inadequacy of its regular information gathering. 

Several participants expressed a mix of interest and concern around the emerging use of generative technologies. Some acknowledged AI’s potential in handling high-volume, repeatable tasks such as monitoring or document review. But there was also caution about unintended consequences — particularly if AI were to drive automated supervisory actions based on poorly defined rules or without contextual human judgment.

Participants encouraged the FCA to co-develop principles for responsible regulatory technology — including transparency over how supervisory data is used, proportionality in requests, and assurance that insight, not just information, is driving decision-making.

5. FCA Success Measures – Realism & Readiness

Participants generally supported the FCA’s intent to define and measure its strategic success. Many welcomed the ambition to align supervisory outcomes more closely with long-term public and market good. However, respondents questioned whether the current success measures are realistically framed, appropriately targeted, or practically implementable.

Several contributors felt the outcomes read more like aspirations than deliverables. One interviewee described the measures as “very high-level” and queried whether the FCA’s expectations aligned with those of industry. Others questioned the clarity of terms such as “access to capital”, asking how these would be defined or tracked in practice. The ambition was seen as legitimate — but only if underpinned by operational clarity, sector-specific interpretation, and achievable timescales.

Participants also shared concerns that internal regulatory processes may not yet be capable of delivering success at the pace or consistency envisaged. One example cited a six-month delay in the authorisation process due to internal misallocation, despite stated commitments to streamlining. The call for more consistency, predictability, and practical responsiveness was echoed throughout. Others suggested that progress on cross-sector priorities — such as growth enablement or fraud reduction — would depend on coordination beyond the FCA, requiring more mature engagement with firms, other regulators, and policy bodies. As one respondent noted, the issue is not whether the FCA’s targets are right — but whether its current systems can actually deliver them.

Conclusion

This paper captures not just regulated participant’ concerns, but their willingness to engage constructively in the FCA’s evolving strategy. While there is clear support for the goals of the 2025–2030 plan, firms are looking for greater consistency in supervisory tone, clearer signals on innovation boundaries, and practical co-working on data and conduct expectations.

If the FCA can evolve its style as well as its substance — moving from assertive oversight to confident collaboration — it may unlock not just compliance, but trust, agility, and long-term competitiveness.

We would like to thank participants for their contributions. Ellis Wilson will continue to support firms in navigating this evolving landscape, and in contributing to a regulatory system that enables innovation, integrity and competitive strength.

Ellis Wilson Limited, October 2025