“Regulatory Greens”: FCA’s Balanced diet

Author: Priscilla Gaudoin - Head of Risk & Compliance - published June 2025

Topics: Regulatory Strategy, Governance, Accountability

Regions and Regulators: UK, FCA

"Good strategy, like good nutrition, is all about balance. The right elements, working together, to support long-term health." (Emily Shepperd, FCA's COO, June 2024) 

On 17th June 2025, Emily Shepperd, the FCA’s Chief Operating Officer, delivered an insightful keynote speech at the Association of British Insurers event in London. Using a nutrition analogy to communicate her message, the FCA’s COO outlined the regulator’s new five-year strategy, describing a balanced “four-a-day” diet designed to strengthen the UK financial services sector.

Figure 1: FCA’s balanced regulatory diet

1. Antioxidants: Fighting Financial Crime

FCA emphasised that combatting financial crime is like consuming antioxidants, essential for neutralising harmful elements and preserving trust in the system. This aligns with the FCA’s earlier cultural insights, where non-financial misconduct (such as bullying and harassment) was identified as a critical warning signal of deeper toxic cultures. In practice, this ‘antioxidant’ strategy translates into proactive surveillance and swift action against both financial wrongdoing and cultural decay.

2. Fibre: Being a Smarter Regulator

Just as fibre helps eliminate waste, the FCA’s smarter regulator initiative focuses on clearing outdated rules and removing duplication. This addresses consistent industry feedback that excessive compliance burdens are stifling innovation and growth. In fact, a recent House of Lords report described a “deeply entrenched risk-averse culture” at regulators like the FCA and PRA, calling for more appropriate regulation that fosters economic activity. Shepperd’s speech outlines how the FCA is becoming more proportionate, predictable and purposeful.

3. Carbohydrates: Supporting sustained economic growth

Describing growth as the regulatory equivalent of carbohydrates, Shepperd reaffirmed the FCA’s commitment to market development through its new listings regime, the launch of long term assets funds, crypto frameworks, and simplifying financial advice. Reforms like the secondary growth objective, passed in 2023, require the regulator to balance consumer protection and stability goals with that of facilitating growth. This is a balancing act.

4. Vitamins and minerals: Helping consumers navigate financial lives

Consumers’ financial health relies on essential vitamins. The FCA’s emphasis on helping users navigate their finances through clarity, resilience and wellbeing. This builds upon earlier regulatory messages about cultural foundations: deploying Consumer Duty, clarifying advice boundaries, and reinforcing firm conduct over product distribution.

FCA’s Broader Strategic Themes:

Shepperd's speech links to the broader FCA strategy in the following ways:

1. Culture as the regulatory Backbone

Regulatory focus on culture, including healthy behaviours, tone at the top, and governance underscores culture’s role as the unseen mortar holding regulatory pillars together. This mirrors another speech from July 2023, “Culture Must Change to Expectations”, where Emily Shepperd stressed culture’s role in shaping firm conduct under the Consumer Duty.

The theme of corporate culture, encompassing psychological safety, active listening, and tackling non-financial misconduct, has appeared repeatedly, with speeches emphasising cultural contagion and the ripple effects of senior accountability. Culture shapes and drives the actions and behaviours within a firm, how does your firm measure its success?

 Figure 2: FCA’s broader strategic themes  

2. Balancing protection and growth

Recent announcements by the FCA’s leadership reflect an organisational shift. Namely that of embracing their growth mandate without compromising customer trust.  The Lords report added fresh pressure, calling for regulatory streamlining, yet affirming consumer protection remains paramount.

Both the FCA's CEO and Chair, Nikhil Rathi and Ashley Alder, have publicly acknowledged that complete deregulation, or a “race to the bottom”, is not the goal. Instead, they propose ‘responsible risk-taking’ supported by clear frameworks and regulatory purpose. Firms need to ensure that they adopt an appropriate strategy to fulfil their Consumer Duty obligations. In this way, firms will support their customer’s growth as well as their own.

3. Regulatory Modernisation in Action

The smarter regulator theme signals a transformation in regulatory tools and methodology. Initiatives include retiring legacy guidelines, streamlining queries, and applying rapid policy ‘sprints’ to clarify high-priority areas like advice boundaries and data collection. Such agility contrasts with past delays and underpins the FCA’s new culture of clarity and efficiency.

Why It Matters:

For Firms: There is a clear signal that regulatory compliance must be smart, proportional, and growth conscious. The era of paperwork-heavy regulation is giving way to outcome-driven oversight.

For Consumers: The vitamins and minerals approach ensures people are better supported in decision-making, from everyday banking to complex investments.

For Investors and the Economy: A balanced regulatory ecosystem mitigates systemic threats while fostering innovation, open listings, and fintech development, all vital for UK economic resilience.

Figure 3: Key elements impacted by regulation

The Way Ahead:

The key messages from this speech mean that industry should consider the following:

• Firms must actively embed a strong compliance culture and combat misconduct through structured governance and behavioural incentives
• The FCA must continue sculpting smarter regulation, consolidating rulebooks, and fostering rapid policy responses
• Both the regulator and industry should embrace the dual mandate of protecting consumers whilst enabling a flourishing financial market.

Firms and regulators alike now need to move on from tackling the tough issues (“eat the frog”) in 2023, and measuring the appetite for innovation in 2024. The full regulatory diet is composed of fighting financial crime, efficiency, growth, and consumer strength.

“Eating Your Regulatory Greens” marks a strategic reaffirmation from the FCA. A balanced nutritious regulatory regime is essential for sustainable financial health. It charts a clear path toward smarter, consumer-centred, and growth-aligned regulation.

How Ruleguard Helps The Financial Sector:

Ruleguard is an industry-leading GRC software platform designed to help regulated firms manage the burden of evidencing and monitoring compliance. It has a range of tools to help firms fulfil their obligations across the UK, Europe, N America, and APAC regions.

Ruleguard helps firms stay ahead of regulatory developments by automating and monitoring regulatory changes, and turning complex updates into actionable insights.  This enables firms to proactively manage compliance, reduce risk, and allocate resources more effectively.  Helping firms to stay ahead of both regulators' expectations and industry shifts.

The Ruleguard's Regulatory Updates Solution allows firms to:

• Identify regulatory changes
• Assess any impact upon operational processes, policies, risks, and controls
• Access a repository of regulatory content from multiple sources
  

Ruleguard is a comprehensive solution that lets you protect and propel your business forward through the complex regulatory landscape.

Related Webinars, White Papers and Blogs

Ruleguard hosts regular events on various regulatory topics. You can watch our webinars on-demand at your convenience, or read our blogs, white papers, infographics, and tune in to our podcasts.

• Bridging Compliance and Technology
• UK & Ireland: Regulatory Priorities for 2024/25
• Regulatory Updates: Blueprint for Success
• Regulatory Developments: How to be a catalyst for change
• Senior Managers & Certification Regime: Transforming Culture
• Guide to the FCA's Strategy
  

It all starts with the rules

Ruleguard’s Regulatory Updates Software is designed to streamline the process of staying compliant with ever-changing regulations. It provides a comprehensive solution for compliance teams to manage regulatory updates efficiently and effectively.

 

Book a discovery call today and discover how Ruleguard can help your firm stay ahead with precision with effortless regulatory scanning and updates

 

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About the author

In a career spanning 30 years, Priscilla has worked as a consultant, CCO and MLRO providing regulatory oversight and advice to firms across the financial services industry. She is responsible for our thought leadership programme, writing regular articles and white papers, and hosting webinars on a variety of regulatory matters.

She is a Fellow of the International Compliance Association, a certified GRC practitioner, and a member of the Institute of Risk Management.

 

Contact Priscilla