In 2024, financial firms face increased regulatory pressure due to heightened scrutiny by the FCA.
- KPMG UK’s Regulatory Barometer indicates intensified consumer protection oversight.
- The digital finance reliability score improved from 6.9 to 7.3.
- Firms must adapt to new regulatory landscapes to ensure compliance and avoid penalties.
- Increasing financial distress is noted among UK businesses, affecting market stability.
In 2024, the financial sector is witnessing unprecedented regulatory challenges. The Financial Conduct Authority (FCA) has amplified its scrutiny over the consumer duty reform, significantly impacting financial firms. This heightened oversight is driven by the need to ensure consumers are adequately protected in an evolving financial landscape. As highlighted in KPMG UK’s latest Regulatory Barometer, companies are under pressure to comply with increasingly stringent standards.
KPMG UK’s analysis reveals that consumer protection currently drives the most considerable rise in regulatory demands. Financial firms are mandated to prioritise consumer interests, fostering a transparent market environment. This has led to an environment where businesses must strategically navigate through complex regulatory requirements, ensuring all operations and services align with the enhanced directives.
The report also underlines a notable improvement in the digital finance sector’s reliability, with scores climbing from 6.9 to 7.3. This indicates a positive shift in the stability and trustworthiness of digital financial services. Companies operating digitally are likely to experience better consumer engagement and trust.
Furthermore, UK businesses are encountering increased financial strain, with a substantial rise in those classified as being in ‘significant’ financial distress within the third quarter. This financial pressure is exacerbated by the stringent demands imposed by enhanced consumer protection regulations. Such financial challenges are prompting businesses to reassess their financial strategies to maintain operational viability.
It is imperative for firms to quickly adapt to these regulatory changes to maintain their market presence and avoid potential sanctions. Ensuring compliance not only aids in mitigating legal risks but also enhances the company’s reputation within the industry.
The evolving regulatory landscape necessitates agile adaptation by financial firms to thrive amidst growing pressures.
