UK financial services enforcement themes and looking ahead

Although 2024 has not seen a return to the levels of fines and outcomes of the pre-financial crisis era, there has been a notable uptick in published outcomes and financial penalties from the FCA in the past year when compared against the position in the year before that. There is also a notable increase in the number of FCA fines imposed on individuals – 14 versus 2. Fines against individuals have increased too, although at a lower rate proportionately. 

Whilst the FCA continues to be the most active enforcement regulator in the UK financial services arena, the trend of PRA intervention continues, with the PRA imposing over £90m in fines during 2024.

See our article on UK financial services enforcement for a summary of key enforcement decisions and other developments in 2024. 

Enforcement themes for 2025 

The themes of consumer protection, financial crime, wholesale conduct and enforcement against individuals for non-financial misconduct are likely to continue with some variations.

Consumer protection – Themes from FCA (and PRA) enforcement in 2024 include unfair treatment of customers in arrears, misselling of complex or illiquid financial products, pension transfer advice, and risking consumer detriment by miscategorising customers or their accounts. Going forward, enforcement investigations are also expected to focus on unfair consumer outcomes in breach of the Consumer Duty and commission arrangements following the anticipated Supreme Court hearing listed in early April. 

Financial crime – Tackling financial crime using all of the available tools, including regulatory enforcement, remains an FCA priority. The FCA published its first decision against a firm for failings in sanctions screening systems. We expect the FCA to continue to take action against firms for failings in financial crime controls, including AML controls, and continue to use a range of tools to tackle fraud against customers.

Wholesale sector activity – There were 2 substantial fines relating to trading controls, serving as a reminder in an area that has not been a focus of enforcement decisions recently. The FCA also took action to emphasise the responsibilities of PDMRs when it comes to personal trading. The FCA has invested heavily in data analysis with a view to improving market and transaction monitoring to detect more instances of market abuse and the FCA has mentioned a number of market abuse scenarios present in open investigations. 

Senior manager conduct – The FCA announced decisions where an individual’s conduct inside or outside the workplace indicated a breach of conduct rules, often including allegations of failing to report or failing to be open with the FCA. The FCA will continue to focus on non-financial misconduct in the financial sector and will announce the outcome of its consultation on rule changes to expressly refer to non-financial conduct.