Corporate

UK Financial Conduct Authority (FCA) publishes new data strategy

Background

Technology and advanced analytics techniques have evolved significantly over the 6 years since the adoption of the FCA’s initial data strategy in 2013. Noting in particular, that:

there are more regulated firms using advanced techniques in their business, and we need to understand them to regulate them effectively.

The FCA has published a new Data Strategy with ambitious aims. The FCA’s core objective with the new strategy is to:

build the right skills, make available new technologies and embed a culture that encourages innovative thinking across the organisation

Specific Aims

The specific aims of the new strategy are to enable the FCA to use more advanced data analytics to:

  • Review historical data and assess where harm has occurred to learn lessons for the future.
  • Improve its collection and use of intelligence to better understand harm, and manage it more swiftly, including by active scanning of regulated firms and market infrastructure.
  • Improve its use of predictive analytics by using advanced data analytic techniques to spot patterns and trends across firms, business models, and sectors to identify harm and intervene quickly.
  • Strengthen its analytics capabilities, to help decision-making and priority setting, including by simulating policy outcomes, using automation and analysis to improve the way FCA regulates.
  • Increase efficiency and value for money by sharing data more effectively and streamlining work across the FCA.

How FCA seeks to achieve its aims

The FCA plans an ambitious portfolio of work over the next five years with a focus on the following areas:

  • A new FCA data operating model that provides central capabilities and services to  grow data and analytical capability throughout the organisation.
  • Improved central data services, technology platforms and data management and analytical tools.
  • Initiatives across all divisions to exploit its new capabilities.
  • Changes to its culture and skills to provide the environment, training and recognition for all employees to identify and champion opportunities to fully exploit data and deliver improvements in their areas.

Next steps

This is an ambitious and long term programme and the FCA’s initial focus over the next 12 months will be on:

  • Increasing data science resource throughout the organisation, making it a core capability, and growing our overall data and analytics skills via a comprehensive learning and development programme.
  • Testing and deploying new tools such as web scraping, network analytics and natural language processing for a wide range of scenarios.
  • Looking at how new tools and techniques can be used to better detect financial crime.
  • Seeking to improve the flow and quality of valuable public and commercial data collected.
  • Investigating how technology can change the interface between the FCA and regulated firms by;
    • making parts of our Handbook machine-readable and executable; and
    • moving to a new platform for data collection, which will replace the current “Gabriel” platform.
  • Together with the Bank of England, exploring how to link regulation and Firms’ compliance procedures, policies and standards together with firms’ transactional applications and databases.
  • Modifying its risk and control framework to ensure new tools and techniques are used safely.

Watch this space for further developments.

Karen Fountain