FCA fails to meet target for completing investigations into complaints in 2019/20

Maria Nikolova

There has been a sharp increase in complaint volumes which has challenged the team’s capacity to meet demand, the UK regulator says.

The UK Financial Conduct Authority (FCA) today posted data about its performance in a range of areas for the period from April 1, 2019 to March 31, 2020.

Some of the areas the FCA has improved compared to last year include responding to letters from firms. The regulator responded to 98.7% of letters from firms within 5 working days, compared to 91.9% in 2018/2019 increasing the satisfaction score for consumer correspondence to 80% (up from 78% in 2019 and 79.3% in 2018) and meeting this target for the first time in over 2 years.

However, there are areas where the regulator still needs to improve. This includes the response rate when completing an investigation into a complaint. For complaints dealt with by the local business area, the FCA target is to complete an investigation and send a response to the complainant within 10 working days. The FCA has set a voluntary target of meeting this timeframe for 95% of cases. But there has been a sharp increase in complaint volumes which has challenged the team’s capacity to meet demand. As a result, the FCA has seen a sharp decline in this standard, only achieving 79.1% in 2020 compared with 96.6% in 2019.

There is still room for improvement with regard to the response rate to Freedom of Information Act (FOIA) requests. FCA’s statutory target is to respond to 90% of requests within 20 working days and in 2020 the response rate dropped from 88.5% in 2019 to 84.6% this year. The FCA received a total of 803 requests in 2020 (up 13% on the previous year’s total), resulting in some delays in responding in the second half of the year.

The regulator also lagged behind targets when it comes to processing an application for ‘approved person’ status for Customer Function (CF) and Significant Influence Function (SIF) roles. The FCA saw a large decline in processing applications for CF and SIF roles within target, dropping from 83.9% in 2019 to 56.6% this year, which is below FCA’s voluntary target of 85%. This was due to a significant number of solo-regulated firm applications the FCA received before the Senior Managers Regime for solo-regulated firms commenced. This level was over and above the expected level of conversion activity.

Another area where the FCA failed to meet its target in 2019/20 is the processing of a complete notification for appointed representative status. The regulator also saw a decline in processing these notifications within target this year, dropping from 96.6% in 2019 to 84.2% this year. This means that the FCA has fallen below its voluntary target of 95%. The time taken to process appointed representative notifications was affected by the work to deal with the significant number of solo regulated firm-related applications the FCA received before the start of the Senior Managers & Certification Regime (SM&CR) in December 2019, which was over and above the expected conversion activity.

Overall, the FCA achieved its SLA targets on 45 of its standards (75%) this year which is the same as in 2019. The regulator has, however, seen an increase in the number of standards reporting below its minimum targets. In 2019, it had 2 (3.3%) standards reporting below its minimum targets compared to 7 (11.7%) in 2020.

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