FCA sets out its 2026 regulatory priorities for the Retail Banking sector

The FCA has now published its Regulatory Priorities report for the Retail Banking sector

Reports such as this one will, going forward, replace the FCA’s portfolio letters, with each report outlining the FCA’s priority areas of focus for firms operating in that sector.  The reports also cover a wider assessment of previous activities in that space, a helpful summary of the FCA’s publications and speeches relevant to the sector, and a forward-looking timeline of key events.

Key priorities

There is recognition of the significantly changing landscape of retail banking as people use branches less and digital channels more, and with business models diversifying with new entrants and more fintech involvement, and as open banking and payment types evolve.  The FCA’s key focus areas therefore will come as no surprise, with a spotlight on ensuring that retail banking  “stays accessible to consumers and businesses, gives them good outcomes, is operationally resilient including against bad actors, and fights hard against fraudsters and financial crime” :

Access to cash and essential banking services: FCA expectations for firms include the need to fill gaps in local cash access services, and to avoid foreseeable harm when implementing digital first transformations.  The FCA’s evaluation of the Access to Case regime review will being in Q4 2026, with the output published at the end of Q2 2027

Good outcomes from products and services: Whilst firms have made good progress driving positive outcomes under the Consumer Duty, they should keep developing their data for monitoring retail customer outcomes, so they can see where further action is needed to support consumers in pursuing their financial objectives and avoid causing them foreseeable

Harm. The FCA in 2026 aim to consult on simplifying prescriptive disclosure requirements following the Retail Banking Disclosure Rule review. In H1 2026, the FCA will consult on clarifying the application and requirements of the Consumer Duty, including distribution chains.

Fighting fraud and other financial crime: Firms must monitor their fraud, money laundering and other risks, and continuously refine their defences - they should help consumers understand fraud risks and support victims fairly. In 2026 a statutory instrument is expected to be laid following HMT’s consultation on improving the effectiveness of the money laundering regulations.

Operational resilience and data security: Firms should identify emerging risks and critical third-party dependencies, refining action plans to address vulnerabilities and remain within important business service impact tolerances. They should continue improving their cyber and information protection strategies, with tested recovery plans. Planned for 2026, is a PRA/BoE consultation on information and communication technology, cyber risk management and resilience. In H1 2026, the FCA, PRA and BoE are expected to publish their final rules on operational resilience: incident and outsourcing and third-party reporting, with implementation 12 months later.

Other focus areas include:

• outcomes for small businesses  (the FCA want firms to assess business customers’ treatment and access to services, and to identify potential improvements, particularly in sectors important to our national and economic security and the medium- to long-term growth of the UK economy);

• Innovations in retail banking (with firms expected to consider and test the opportunities and risks new developments such as AI, targeted support, and other payments related innovations)

• the motor finance commission review (the FCA is deciding whether to introduce a redress scheme – if so final rules are expected in late March); and 

• seeking to halve the burden of the SMCR. 

The FCA’s report can be found here