Financial firms are shutting down hundreds of thousands of suspected money mule accounts, but organised criminal groups are still shifting dirty money through multiple bank accounts before cashing out. An FCA survey found firms have closed an increasing number of suspected mule accounts over the last 3 years: 238,396…
Why this matters
This is an FCA enforcement update based on a multi-firm survey of 35 institutions covering retail banks, building societies, challenger banks, payment institutions and e-money institutions.
Four in 5 less experienced investors have used AI for help with investing – and around two-thirds report doing so occasionally or regularly. New research focused on 18- to 40-year-olds who own or are considering investments showed that 56% trust AI tools, more than TV and radio (47%), press (46%) or social media…
AI Analysis
The FCA published research on 2026-08-27 showing that 56% of surveyed UK investors aged 18 to 40 trust AI tools for investment-related information, while 44% incorrectly believe AI-generated financial information is regulated. The publication does not introduce new rules or deadlines, but it signals heightened FCA concern about consumer misunderstanding, the boundary between general-purpose chatbots and regulated financial advice, and the absence of FSCS or Financial Ombudsman Service protection for unregulated AI outputs.
Key dates
2026-07-24
The FCA conducted the Attest quantitative survey of 666 UK adults aged 18 to 40 who owned investments or were considering buying investments within 12 months.
2026-08-27
The FCA published the press release and research findings on young investors' trust in AI.
Suggested considerations
Compliance teams may wish to map all AI use cases across investment research, recommendations, suitability, appropriateness assessments, client communications, and financial promotions, distinguishing general-purpose tools from systems specifically configured to provide financial advice.
Firms should consider assessing whether any AI-generated output amounts to a personal recommendation, regulated advice, or a financial promotion under the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, rather than relying on the technology's general-purpose label.
Firms using AI in regulated activities should consider applying the same suitability, appropriateness, customer understanding, disclosure, record-keeping, oversight, and accountability standards that apply to equivalent human-led processes.
Customer-facing communications may warrant clear explanation that general-purpose chatbot outputs are not FCA-regulated advice and do not themselves create entitlement to FSCS compensation or access to the Financial Ombudsman Service.
Compliance teams may wish to test AI outputs for hallucinations, stale or unsupported sources, misleading performance claims, inappropriate personalisation, bias, and inadequate risk warnings, with escalation and human-review controls for higher-risk outputs.
Firms should consider reviewing whether AI-generated content used in promotions complies with the FCA financial promotion restriction in section 21 of the Financial Services and Markets Act 2000 and applicable FCA financial-promotion rules.
Governance reviews may include vendor due diligence, approved-use restrictions, audit trails, model-change monitoring, incident reporting, staff training, and controls preventing customers or staff from treating AI output as a substitute for regulated advice.
Firms may wish to monitor the FCA's expected late-2026 publication on good and poor AI practice and any subsequent FCA, HM Treasury, or industry measures addressing advice-like outputs from general-purpose AI.
What changed
No binding regulatory requirement, rule, prohibition, or implementation deadline was introduced. The FCA clarified its current supervisory position that general-purpose AI chatbots are not regulated by the FCA where they respond to varied prompts and are not specifically established to provide financial advice, research, or decision-making support. By contrast, an AI tool specifically deployed to provide financial advice would be likely to fall within the FCA's remit and could engage the existing UK regulatory framework for regulated advice and financial promotions.
Compliance impact
The immediate impact is supervisory and conduct-related rather than a new legal obligation: firms should expect greater scrutiny of AI-enabled advice, investment communications, consumer understanding, and the distinction between regulated and unregulated services. Poor controls could contribute to unsuitable recommendations, misleading financial promotions, consumer harm, complaints, enforcement under existing FCA rules, and disputes in circumstances where FSCS or Financial Ombudsman Service protection does not apply.
Financial products and services shape some of the most important decisions we all make – from saving and borrowing, to protecting ourselves and our families when things go wrong.Consumer needs vary widely, and there’s no such thing as a standard consumer. Our Financial Lives data shows a huge spread of needs…
AI Analysis
The FCA blog “Why getting product design right really matters to consumers” is a supervisory communication reinforcing how firms must design, monitor and distribute products under the Consumer Duty, with a particular focus on product governance, target markets, and ongoing outcomes monitoring. It matters for compliance teams because it sets out FCA expectations beyond the black‑letter rules, highlighting good and poor practices that will inform future supervision, interventions, and potential enforcement.
Key dates
31 July 2023
– Consumer Duty (Principle 12 and PRIN 2A) applies to all new and existing in‑scope products and services open to new business for retail customers
31 July 2024
– Consumer Duty applies to closed products and services (legacy books), extending the expectations on product design, monitoring and fair value to those products
Suggested considerations
Review and update product governance frameworks to ensure they explicitly incorporate Consumer Duty outcomes, including structured consideration of customer needs, characteristics and objectives at every stage of product design and lifecycle.
Define and document granular target markets for each retail product and service, clearly articulating which customer segments the product is designed for, and excluding groups for whom the product could cause foreseeable harm.
Map products and services against vulnerable‑customer characteristics and update design, features, pricing and servicing models to mitigate risks and support good outcomes for vulnerable groups.
Implement or enhance processes to collect comprehensive management information on consumer outcomes (complaints, customer feedback, usage patterns, lapse and cancellation data, arrears and forbearance metrics) for each product.
Establish governance mechanisms to ensure that insights from monitoring and MI lead to timely, documented actions to improve products, pricing, communications or customer journeys where emerging risks or poor outcomes are identified.
What changed
- FCA reinforces that product design must be explicitly based on evidenced consumer needs, characteristics and behaviours, rather than generic assumptions or internal commercial priorities.
Firms are expected to define target markets at a granular level, avoiding broad or generic categories that mask differing needs or risks (especially for vulnerable customers).
Product governance must be embedded into business‑as‑usual decision‑making with clear ownership, challenge and accountability, not treated as a one‑off Consumer Duty implementation project.
Manufacturers and distributors must maintain robust, ongoing monitoring of consumer outcomes using a wide range of management information, including complaints, usage patterns, early cancellations...
There must be a clear, demonstrable link between monitoring and remedial action; collecting data without acting on emerging risks is characterised as weak practice.
Compliance impact
Non‑compliance with these product‑design and governance expectations under Consumer Duty exposes firms to significant supervisory challenge, enforcement risk, potential redress exercises and reputational damage. FCA is signalling that weak product governance and failure to act on outcomes data will be treated as systemic conduct failings rather than isolated issues.
The Retail Payments Infrastructure Board (RPIB), led by the Bank of England, recently published a consultation on the future retail payments infrastructure.To support the consultation, the Payment Vision Delivery Committee (PVDC) which comprises representatives of HM Treasury, the FCA, Bank of England and the PSR, has…
AI Analysis
The FCA statement confirms that the Retail Payments Infrastructure Board (RPIB), led by the Bank of England, has launched a major consultation on the **design of the future UK retail payments infrastructure**, supported by contextual material from the Payments Vision Delivery Committee (PVDC). This marks a key implementation step in the UK National Payments Vision, with significant implications for commercial models, access, consumer protection and financial crime controls across all retail payment schemes and providers.
Key dates
Autumn 2026
(TBD) - PVDC expected to publish its detailed **strategy for retail payments infrastructure**, setting key priorities for next‑generation infrastructure and aligning with the National Payments Vision
Q2 2026
(already in train) - HM Treasury consultation on retained EU payments law and FCA engagement paper (Payments Forward Plan context; relevant for alignment with infrastructure changes)
25 June 2026
- Retail Payments Infrastructure Board consultation on the design of the Future Retail Payments Infrastructure is launched
11 September 2026 Deadline
- Deadline for submission of responses to the RPIB consultation on the future retail payments infrastructure
Suggested considerations
Assess and document your firm’s current and projected use of UK retail interbank payments (including Faster Payments, account‑to‑account, and cross‑border flows) to inform your response to the RPIB consultation.
Prepare and submit a coordinated consultation response to the RPIB by 11 September 2026, covering your views on payment journeys, design choices, consumer protection needs and financial crime controls.
Review your firm’s commercial and pricing models for interbank payments to understand how potential changes to the future infrastructure’s commercial model could affect revenue, costs and access.
Map dependencies between your operational resilience framework and the existing UK retail payments infrastructure, and identify key risks and mitigants under a transition to the next‑generation infrastructure.
Engage with industry bodies, Pay.UK and relevant trade associations to align positions on access, interoperability, fraud management, and technical standards for next‑generation retail payments.
What changed
- A new governance and delivery model for UK retail payments infrastructure is being operationalised, with strategy set by the PVDC, design work led by the RPIB, and implementation by a new...
The RPIB has launched a formal consultation on the design of the future retail payments infrastructure, seeking views on payment journeys, key design choices and priorities.
The PVDC has published additional context to support stakeholders’ reading of the consultation, including expectations for the commercial model, consumer protection outcomes and financial crime...
Responsibilities across the ecosystem are being reset, with clearer roles for public authorities (HM Treasury, Bank of England, FCA, PSR), Pay.UK, and industry participants in designing and...
Next‑generation infrastructure is expected to support account‑to‑account payments at point of sale, enhanced cross‑border payments, and interoperability with new forms of digital money (including...
Compliance impact
Non‑engagement with this consultation and subsequent strategy may leave firms exposed to future infrastructure, access and fraud‑control requirements that they have not planned or invested for, with potential operational disruption, competitive disadvantage and heightened regulatory scrutiny. In the medium term, failure to adapt to the new infrastructure model could impair compliance with payment systems regulation, operational resilience expectations and Consumer Duty outcomes.
The Bank of England has published a joint review with the FCA on how the Memorandum of Understanding (MoU) for financial market infrastructure (FMI) is working. The Bank of England and the FCA (the authorities) cooperate on the supervision of FMIs.The authorities consulted with FMIs to assess the effectiveness of…
AI Analysis
The Bank of England and FCA have completed their 2025/26 joint review of the Memorandum of Understanding (MoU) governing cooperation on the supervision of UK financial market infrastructures (FMIs) and have concluded that current arrangements remain effective, well‑coordinated and free from material duplication. For compliance teams at FMIs and connected firms, this confirms regulatory expectations around information‑sharing, supervisory engagement and coordinated oversight by the two authorities, but does not introduce new rules or materially change existing supervisory practice.
Key dates
2024
– The Bank of England and FCA wrote to CCPs, RIEs and RCSDs to request feedback on the effectiveness of cooperation under the MoU based on firms’ interactions during 2024
2025/26
– The authorities conducted the annual joint review of the MoU for FMIs, considering the responses received from supervised entities over the preceding 12 months and assessing the effectiveness of coordination and duplication
Annually (ongoing)
– The Bank of England and FCA will continue to review the MoU each year, including soliciting feedback from FMIs, to confirm that supervisory cooperation remains effective and to identify potential enhancements
Suggested considerations
Confirm internally that your firm’s regulatory engagement framework recognises the Bank of England–FCA MoU and clearly allocates responsibilities for managing relationships with both authorities in line with their respective roles.
Review and, where necessary, update internal regulatory communications and escalation procedures to ensure that information relevant to both the Bank of England and FCA can be shared consistently, accurately and on a timely basis, in anticipation of coordinated supervisory expectations.
Prepare to continue providing structured, constructive feedback during the annual MoU review process by maintaining records of supervisory interactions with each authority, including instances of overlap, gaps, or divergent expectations.
Align incident management, operational resilience and major change approval processes with the expectation that both authorities may need to be informed and coordinated, and verify that notification playbooks and contact trees reflect this dual‑regulator structure.
For groups operating multiple FMIs or cross‑border infrastructures, map where other regulators rely on the Bank of England/FCA supervisory cooperation (for example, via substituted compliance or recognition regimes) and integrate this into your global regulatory engagement strategy.
What changed
- The Bank of England and FCA confirm, following consultation with FMIs over the last 12 months, that the existing MoU framework for supervisory cooperation on financial market infrastructures...
The authorities explicitly reaffirm their commitment to efficient coordination to enhance the effectiveness of supervision, signalling continued emphasis on timely, accurate and proactive information...
The statement maintains, rather than revises, the current allocation of responsibilities between the Bank of England (as primary prudential and systemic supervisor for FMIs) and the FCA (as conduct,...
The authorities confirm the continuation of an annual review process of the MoU, including consultation with supervised FMIs to obtain feedback on how coordination is working in practice, embedding...
The publication sits alongside the underlying 2025 MoU text (and the broader multi‑regulator MoU framework with FCA, PRA and PSR), reinforcing that FMIs should align their governance, reporting and...
Compliance impact
Non‑compliance would not typically arise directly from the MoU review outcome itself, but FMIs that fail to align with the coordinated expectations and information‑sharing practices of the Bank and FCA risk fragmented supervisory relationships, increased scrutiny, and potential enforcement where underlying prudential, conduct, or operational resilience requirements are not met. Effective engagement with both regulators remains critical to maintaining authorisation, recognition status and continued operation of systemically important market infrastructure.
Financial firms have made progress in preventing sanctions breaches – with £37bn worth of assets frozen in the UK as of last year – but gaps remain, warns the FCA. The Office of Financial Sanctions Implementation (OFSI) and the Office of Trade Sanctions Implementation (OTSI) implement financial and trade sanctions…
When consumers are wronged, many rightly seek fair compensation. Some complain directly, without paying a penny using free Ombudsman services. Others turn to claims management companies (CMCs) or law firms.They can provide a valuable service and support access to justice.However, we’ve seen firsthand from the way some…
Why this matters
FCA announces comprehensive market study of claims management companies (CMCs) and law firms handling financial services and housing disrepair claims. Addresses poor conduct including misleading advertising, unfair fees, and lack of consumer consent.
We are launching a review of the claims management market, following concerns that consumers are being failed by some claims management companies (CMCs) and law firms. The review will look at the root causes of poor practices across the market, like aggressive marketing, misleading advertising and unfair exit fees…
Open finance has vast potential. It promises to transform financial services for millions of people through firms using customers’ data in bigger and better ways. But to make that promise a reality, we need to look at how it works in practice. How does sharing data solve real problems for people and businesses?That’s…
Under the Consumer Duty, firms must report annually on what their monitoring found about customer outcomes, and what actions they’ll take as a result.Good Consumer Duty Board reports provide clear evidence about outcomes – helping to turn governance into real change. Boards can ask better questions, hold people to…
Why this matters
This regulatory update from the FCA focuses on the Consumer Duty, which applies across the banking, investment, and wealth management sectors. It discusses progress on firms' annual reporting requirements under the Duty, including improvements in governance, action plans, and data analysis.
How we're investing in data and analytics in consumer financeOur goal is regulation that is evidence-based, targeted, and achieves good outcomes for consumers. That’s why we’ve been using richer datasets and sharper data science to drive better outcomes in the consumer finance market, widen financial inclusion, and…
Why this matters
This regulatory update from the FCA focuses on using data and analytics to better identify and address consumer credit risks, particularly for vulnerable consumers. It discusses the FCA's use of credit file data and novel statistical methods to track consumer credit journeys and spot emerging distress.
The Payments Vision Delivery Committee (the Committee) has published the Payments Forward Plan (the Plan). Read the Plan on GOV.UKThe Committee comprises:HM TreasuryBank of EnglandFinancial Conduct AuthorityPayment Systems RegulatorThe Plan sets out upcoming initiatives across retail and wholesale payments, including…
AI Analysis
The Payments Vision Delivery Committee—comprising HM Treasury, Bank of England, FCA, and Payment Systems Regulator—has published the **Payments Forward Plan**, a three-year regulatory roadmap for retail, wholesale payments, and digital assets, aligning with the UK's National Payments Vision for a trusted, innovative ecosystem. This matters for compliance teams as it provides sequencing and milestones for multiple initiatives, enabling proactive planning amid high regulatory activity, including PSR consolidation into FCA and infrastructure upgrades. It signals coordinated efforts to boost competition, resilience, and innovation while minimizing sector capacity strain.[FCA publication]
Key dates
Q1 2026
HMT consultation response on PSR consolidation into FCA
Spring 2026
HMT update on Consumer Credit Act reform
18 January 2026 Deadline
Deadline for stablecoin issuers to apply to FCA regulatory sandbox; (related push for innovation)
May 2026
FCA Supplementary Regime for safeguarding comes into force
H1 2026
Bank/FCA exploration of regulated stablecoins for on-chain settlement
Suggested considerations
Review the full Plan on GOV.UK (https://assets.publishing.service.gov.uk/media/699f2bc6c497bac082bc76bc/Payments_Forward_Plan_.pdf) and map initiatives to your firm's operations, prioritizing safeguarding, infrastructure, and stablecoins.
Engage proactively: Provide FCA views on standards body (by Feb 2026); participate in Jan-Apr 2026 safeguarding engagement; prepare for VRP rollout (live payments expected Q1 2026).
Stablecoin firms: Submit sandbox applications by 18 Jan 2026.
Monitor and plan: Track Regulatory Initiatives Grid for 2027; assess capacity for sequenced initiatives; ensure compliance readiness for May 2026 safeguarding rules and end-2026 infrastructure changes.
Internal audit: Evaluate current adherence to PSRs/EMRs, especially safeguarding, ahead of consolidation.
What changed
No immediate binding regulatory changes are imposed by the Plan itself; it is a forward-looking roadmap outlining planned initiatives rather than new rules. Key elements include:
Modernisation of payments framework: Consolidation of PSR into FCA, with HMT consultation response in Q1 2026; data/operational enhancements to Faster Payments and Bacs by end-2026.
Infrastructure upgrades: Short-term resilience improvements to Faster Payments and Bacs (end-2026); exploration of regulated stablecoins for on-chain settlement (H1 2026).
Safeguarding enhancements: FCA Supplementary Regime effective May 2026, with engagement Jan-Apr 2026.
Standards and open banking: Industry input on standards body (Feb-Mar 2026 assessment); HMT Data (Use and Access) Act SI in Q4 2026.
Compliance impact
Urgency: Medium. This is a planning document, not enforceable rules, but its milestones trigger near-term actions (e.g., Q1 2026 engagements, May 2026 safeguarding). It matters because it coordinates high-activity areas like PSR-FCA merger and stablecoins, reducing surprises but demanding resource allocation for innovation/resilience amid sector capacity constraints. Firms delaying review risk missing input opportunities or readiness gaps, especially with VRP/stablecoin momentum.
We've launched our new Regulatory Priorities reports, starting with the insurance sector. This marks a new approach that will help to transform our supervision and streamline regulation.We expect regulated firms to follow the rules and stay informed about any changes. This is important for maintaining a safe and…
Why this matters
This regulatory update from the FCA announces a new approach to communicating regulatory priorities, with the launch of streamlined Regulatory Priorities reports for each sector. This is aimed at reducing burden and improving transparency for regulated firms.
The latest Accelerated Settlement Taskforce (AST) report updates on the significant progress made towards the move to T+1. Read the AST report.Jamie Bell, head of capital markets at the FCA, said:'T+1 marks a major milestone in our drive to support growth and innovation. Faster settlement cycles will reduce risk, free…