The regulator said that this approach will enable the FCA to meet the challenges of the increasingly data-driven financial services sector in the UK, the shift to a net-zero economy, the continuing effects of the pandemic, and help build a new regulatory regime after Brexit.

In January, the Supreme Court delivered its judgment in a case brought by the FCA to clarify business interruption insurance cover. Since then, over £1.2 billion has been paid out to settle claims made by small businesses.

The FCA has innovated to better protect consumers by providing information so they can make improved financial decisions. The FCA launched its £11 million InvestSmart campaign in October, targeting its ‘don’t get played’ message at younger, higher-risk investors. The campaign saw the FCA release its first TikTok video and Instagram live session.

InvestSmart forms part of the FCA’s new consumer investment strategy, which is designed to give consumers greater confidence to invest and to help them do so safely. The strategy’s measures include exploring changes to make it easier for consumers to invest in straightforward financial products, more assertive action to disrupt investment scams and strengthening rules around financial marketing.

The FCA has taken away approval to undertake financial services from 176 firms, which have not carried on regulatory activity in the last 12 months. The FCA’s ‘use it or lose it’ approach is designed to protect consumers who may be misled about the level of protection they have when buying products from firms that do not need to be authorised by the FCA.

The FCA has also continued to alert the public to scams, with a record 1,300 warnings issued over the past year. The FCA released its first jingle, to remind consumers to check lenders are genuine to avoid being scammed by fraudsters who charge a fee for a loan that never materialises.

The FCA’s contact centre has this year prevented £4m being lost to scams. Additionally, the FCA has secured £5m to be paid back to people who invested in companies that were not authorised to undertake financial activity. A further £28.5m has been frozen due to FCA action to be paid back to investors, subject to the outcome of legal action.

The FCA has continued to act to protect and enhance the integrity of the UK financial system, earlier this month NatWest was fined £264m, in the FCA’s first ever criminal prosecution under anti-money laundering legislation. In total FCA actions has resulted in financial organisations in the UK being fined £568m in 2021, including £147m against Credit Suisse and £63.9m against HSBC. The FCA has also taken action against individuals for insider dealing, non-financial misconduct and carrying out regulated activities without authorisation. Beside enforcement cases, the FCA has also varied a firm or individuals’ permissions over 100 times in 2021.

To ensure quicker action to protect consumers, the FCA reformed its decision-making processes in November. These changes include allowing senior managers to take the call on a firm’s authorisation, whether to impose requirements or begin criminal or civil proceedings.

The FCA is also applying standards more robustly when authorising firms. In the year to 2 December 2021, 1 in 5 firms (up from 1 in 6 in the year to March 2021) which applied for authorisation were refused, rejected or withdrew their application after discussions with us. Newly authorised financial firms will benefit from additional support following a pilot run by the FCA over the last year. When fully rolled out in 2022, this early oversight, with regular contact from the FCA, will help ensure firms treat their customers fairly during the crucial early years of their development.

The FCA has continued to take a leading role on environmental, social and governance issues. It published a new strategy in November and began a discussion on how investment products should be labelled to give consumers confidence to invest. It also introduced new rules and guidance for listed companies and asset managers on climate-related disclosures.

In rules that take effect from 1 January 2022, the FCA is tackling the loyalty penalty in home and motor insurance. The FCA found the practice of increased renewal prices for existing customers – known as price walking – was distorting the market and limiting competition. The new measures will save consumers £4.2bn over 10 years.

In December, the FCA confirmed changes to its listing rules to help maintain the UK’s market’s reputation for dynamism by supporting new types of companies seeking investment. The changes will help drive economic growth by encouraging private companies to consider listing on the stock market at an earlier stage. This means more investors will be able to share in the growth of these companies, increasing their investment choices.

The FCA has enhanced its world-leading regulatory sandbox, which allows businesses to safely test innovative products or services. The sandbox is now accepting applications on rolling basis rather than firms having to wait for application windows as they previously had to. This will support innovative firms by allowing them to test their ideas at the right point of their development.

Nikhil Rathi, chief executive of the FCA, said: “The FCA has protected customers, enhanced the integrity of the UK’s financial system and promoted competition this year, despite the additional challenges of the pandemic. We have reformed the general insurance market, saving consumers £4.2bn over 10 years, led the transition from LIBOR and helped small businesses claim £1.2bn against business interruption insurance cover. We are looking forward to using our innovative, adaptive and assertive approach to achieve even more for consumers and the financial market next year.”