Faster and simpler regulation has been identified as a priority for the FCA post-Covid, according to the regulator’s chair Charles Randell.

In a speech to the Finance & Leasing Association on 22 April, Randell picked out five areas of priority for the FCA as he looks past the pandemic with “cautious optimism”.

One of these was a new approach to regulation with the chair admitting that complexity is giving way to loopholes and arbitrage.

He said: “In order to regulate in this world, we need to be more agile and confident in using our Principles for Businesses to take action against those firms which are not doing the right thing.

“Transforming the FCA will require us to reset our approach to the principles, including in particular our principle that firms should treat their customers fairly. We have been giving consideration to a new consumer duty (or duty of care) and we will make further announcements about this shortly.”

As an example, Randell highlighted the use of ‘buy now pay later’ products in consumer lending which are still largely unregulated.

He said: “We’ve called this out and the government is acting to change the law. We also see it with online promotions, by unregulated lead generators or scammers.

“We’ve said that the government needs to look again at the legislative framework that allows online financial harm to proliferate.”

Elsewhere, the chair used his speech to identify other areas of priority. This included a continued restructuring of the FCA – evidenced by several recent senior appointments – and a greater focus on basics and outcomes from firms.

With the latter point, this means firms using their data better to identify and intervene with customers sooner who might be in financial trouble.

Randell also used his speech to send a warning that the FCA would be clamping down on how it authorises firms, and how these authorisations are then used.

In the fallout of the LCF scandal, it became apparent that a ‘halo effect’ had been used by unregulated entities to hide behind an affiliate’s authorisation.

Randell said: “This means that we not only need to be rigorous with firms at the point when they apply; if we do authorise them, we need to know whether they are using their authorisation and what for; and we need to quickly remove the authorisations of firms which are not using them or which are misusing them.

“We know what we have to do – and we are already acting, so that a firm with FCA authorisation will have to ‘use it or lose it’.”