What Does the FCA’s New 5-Year Strategy Mean for Lenders?

On the 25th of March 2025, the Financial Conduct Authority (FCA) published their strategy for 2025 to 2030, setting out their vision to support industry growth and improve services for consumers. While the strategy addresses the broader UK financial services landscape, there are several key takeaways for lenders - particularly around lowering entry barriers for smaller firms and fostering growth through innovation.

The FCA has set out four strategic priorities to deliver their overarching vision of “Deepening Trust, Rebalancing Risk, Supporting Growth, Improving Lives.” These are:

• Smarter Regulation: A drive to become more efficient and effective by reforming how they regulate. The aim is to make the process more proportionate, cost-effective, and easier for firms to engage with - enabling the industry to do more, faster.
• Supporting Growth: By rebalancing attitudes to risk, the FCA seeks to unlock investment and innovation, ensuring that UK financial services remain globally competitive and contribute to economic growth.
• Helping Consumers: A focus on building trust and improving access to clearer information and better support for making financial decisions. Consumer Duty remains central to these efforts, requiring firms to deliver good outcomes and act in consumers’ best interests.
• Fighting Financial Crime: A renewed emphasis on scam prevention and tackling market abuse. The FCA will work closely with firms to tackle financial crime, supporting effective controls and intelligence-sharing.

What does this mean for lenders?

The FCA has committed to streamlining their systems through simplified authorisations, fewer follow-up requests, and a sharper focus on collecting only essential data. This will reduce the regulatory burden, lower barriers to entry, and enable faster, more efficient engagement - particularly benefiting SME lenders and start-ups seeking to scale in a competitive market.

Alongside reducing administrative burden, the FCA has signalled a more flexible and proportionate supervisory approach. Firms that demonstrate a clear commitment to doing the right thing can expect less intensive oversight, with greater opportunities to address issues proactively before formal regulatory action is taken. This shift provides well-governed lenders with a more constructive regulatory environment, rewarding strong conduct and enabling them to focus resources on growth and innovation, rather than navigating constant scrutiny.

That said, the FCA has made it clear that they will remain firm in tackling fraud, scams, and cybercrime, and that the Consumer Duty will continue to underpin expectations around fair value, transparency, and good consumer outcomes.