‘Regulation as a means to an end, not an end in itself’ was the title of MBS’ latest Vital Topics lecture from John Griffith-Jones, Chairman of the FCA (Financial Conduct Authority).
He discussed the importance the FCA places on promoting financial regulation that creates real societal and economic value, rather than regulation for the sake of regulation. Leading with regulation through the eyes of the consumer, John simplified this succinctly by highlighting the fact all customers are looking for is for ‘banks not to go wrong.’ They want an ease and convenience that comes from a simplification of products and services.
Pre-empting this week’s Consumer Vulnerability report produced by the regulator, he pointed out that the FCA sought to bring a practical focus on consumer outcomes.
Competition and choice is a recurring theme in financial services. Despite recent initiatives to encourage consumers to be able to switch bank accounts, inertia is still so great that banks are seeing very little difference to the volume of customers choosing to move. John harked back to The Midland Bank’s ‘You don’t have to pay a penny’ marketing campaign in the 1980s which introduced free banking to the UK. The phenomenon is popular among consumers, but could prevent people making rational choices and harms competition with little incentive to bank anywhere else when there’s no cost attached to the service.
He also spoke of the ever-increasing payment methods available to people, and the rise of the tech giants’ interest and influence in payment systems and banking. Opening out to audience questions, the debate for the future seemed clear: will we start to see a new era of financial services with challenger brands and technology businesses revolutionising the sector for the next generation of consumers?