| Link(s): | FCA sets out next phase of smarter, more effective regulation | FCA FCA annual work programme 2026/27 | FCA |
Context
The FCA has set out the next phase of smarter, more effective regulation by publishing its annual work programme for 2026-27, the second year of its current five-year strategy. The work programme outlines plans for using AI to speed up authorisations, testing new tools to identify key risks earlier, with people remaining at the heart of decision-making.
Key points to note and next actions
Alongside the four strategic themes of being a smarter regulator, supporting growth, helping consumers navigate financial lives, and fighting financial crime, the FCA will progress a number of cross-cutting projects including AML supervision reform. The programme details the FCA’s plans under each of the four strategic themes, and outlines major initiatives to simplify processes, remove friction where appropriate, and help firms operate more efficiently:
- Integrating AI into regulatory workflows – enabling the FCA to detect harm more effectively and speed up regulatory decision-making.
- Using generative AI to review documents received from firms – supporting faster decisions. Following successful testing, the FCA will begin rolling out across authorisations and supervision.
- Using a new sandbox environment to test automated data feeds between the FCA and firms – reducing manual effort and improving the timeliness and reliability of intelligence.
- Investing in smarter case handling – using analytics and digital tools to quickly identify the greatest sources of harm and triage intelligence more efficiently.
- Expanding the Supercharged Sandbox – opening to a new cohort of firms and giving them access to high-quality synthetic data so innovative, AI-driven financial products can be safely tested.
- Reducing burdens on firms – removing three more regular data returns, reducing the frequency of another, and moving more regulatory tasks onto My FCA, so firms can manage everything in one place.
- Improving firms’ experience of regulation – with faster authorisation timelines, simplified digital forms, and a new scorecard to better understand and respond to what firms need.
From an insurance perspective, the FCA states that it will progress work set out in its response to the Which? super complaint:
- analysing how different sales processes affect consumer outcomes;
- finding new ways to improve consumer understanding of their cover;
- considering how the FCA captures claims outcomes as part of its post-implementation review of value measures rules; and
- reviewing how home and travel insurance firms oversee third parties involved in claims handling.
The FCA will conclude its pure protection Market Study, will look at ways to reduce the protection gap, and improve consumer awareness and claims experience. It will also examine further claims ratios and incentives for consumers to switch products, and will monitor annual percentage rates in premium finance and act where it has concerns about fair value.