The FCA has outlined its Regulatory Priorities report for retail banking, for the upcoming year, focusing on areas where supervisory and policy scrutiny will intensify. The report targets retail banks and building societies, emphasising the importance of governance, operational resilience, and consumer outcomes amidst ongoing digital transformation and evolving business models.
Cash access and customer inclusion amid digital transformation
The FCA continues to prioritise mitigating risks related to reduced in-person banking as banks adopt digital-first strategies. Retail banks are expected to:
- Address local gaps in cash access in line with the Access to Cash regime
- Ensure that service delivery changes do not disadvantage less digitally capable customers
- Implement suitable alternative arrangements before closing branches
- Avoid unnecessary or prolonged account restrictions caused by financial crime controls
This priority challenges firms to uphold strong governance and evidence-based decision-making, including customer need assessments, risk mitigation, and outcome monitoring following service changes.
Consumer Duty: board-level governance and outcomes monitoring
While progress has been made, the FCA highlights that data, management information (MI), and governance frameworks remain underdeveloped across the sector. Firms must:
- Enhance outcome-focused MI and oversight at senior and board levels
- Act decisively upon identifying harm, poor value, or customer detriment
- Integrate consumer outcomes into product and service design, especially for new or AI-enabled offerings
- Effectively identify, monitor, and support vulnerable customers
Supervisory efforts will shift from initial implementation to ongoing operational assurance, with increased scrutiny on firms unable to demonstrate continuous monitoring and improvement of outcomes.
Fighting fraud and other financial crime
Fraud and financial crime remain central supervisory concerns, particularly with the rise of digital banking complexity. Retail banks are expected to:
- Continuously refine fraud, anti-money laundering (AML), and financial crime controls to address evolving threats
- Promptly remediate any control weaknesses
- Educate customers about fraud risks and treat victims fairly
- Invest in proportionate systems and advanced technologies where appropriate
The FCA emphasises that firms need to be assessing the end-to-end effectiveness of controls, including operational impacts on customers, governance of escalation processes, and balancing crime prevention with service accessibility.
Operational resilience and cyber security
Operational resilience and data security remain pivotal. Firms must:
- Clearly identify critical business services and define impact tolerances
- Map critical internal and third-party dependencies
- Address vulnerabilities within tolerance thresholds
- Maintain resilience amid evolving operating models, suppliers, and technologies
With increasing reliance on outsourcing and partnerships, boards must ensure accountability, control, and assurance remain embedded within the firm.
From priorities to delivery: recommended actions
Boards should view the FCA’s retail banking priorities report as a practical supervisory benchmark. Key recommended actions include:
- Reassessing Consumer Duty evidence against evolving regulatory expectations
- Reviewing digital transformation decisions through a harm-prevention framework
- Stress-testing operational resilience frameworks, including third-party oversight
- Empowering senior executives with authority and capacity to act decisively
Firms demonstrating clear, repeatable operational control aligned with regulatory priorities are better positioned to reduce supervisory interventions and maintain regulatory confidence.
Where delivery challenges typically arise
The FCA signals a move from policy-led compliance to demonstrable delivery assurance. Retail banks and building societies must evidence how regulatory expectations are embedded in daily decision-making, operations, and governance, especially where digital transformation, third-party reliance, and financial crime controls intersect.
Challenges commonly arise in:
- Embedding Consumer Duty monitoring in live product and service management
- Evidencing harm assessments and outcomes from digital-first models
- Strengthening financial crime responses without causing unintended customer detriment
- Maintaining oversight across complex internal and supplier-led delivery landscapes
Momenta supports firms by providing senior interim leaders and regulatory specialists to enhance governance, risk, compliance, transformation and operational resilience. We help firms to close evidential gaps and sustain regulatory momentum without overburdening permanent leadership and teams.
Get in touch to discuss how you can rapidly scale your capability while maintaining clear accountability and board-level assurance.
