RCRO is a key component in the FSA’s consumer protection strategy to identify risks earlier, proactively intervene earlier in the product chain and prevent consumer disadvantages.
The report’s analysis of current and upcoming risks informs how the FSA will set its priorities and deploy its resources. These will be outlined in the FSA’s Business Plan, due for publication next month.
The RCRO analyses the environment in which the FSA, authorized firms and consumers operate. It assesses the main macroeconomic trends, the changing regulatory landscape, developments in firms and markets, and key issues affecting consumers – and the risks these all pose.
Some of these are issues are current, and are subject to ongoing FSA activity, some are emerging, and others have yet to develop but could cause consumer detriment in the future.
Introducing the new publication, Adair Turner, FSA chairman said:
“The Retail Conduct Risk Outlook is a timely reminder of the consumer protection challenges facing the FSA, its successor bodies and financial firms over the coming years. It analyses how environmental trends may influence how firms treat their customers, and assesses the resulting potential for poor customer outcomes. The RCRO informs our dialogue with firms and consumer representatives on conduct risk and will play an essential part in our work to mitigate the potential risks to customers in the future.”
The Retail Conduct Risk Outlook, together with the Prudential Risk Outlook which will be published in March, replaces the Financial Risk Outlook Series. The Financial Risk Outlook has been published since 2002.
The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.