What the FCA’s 2026 Regulatory Priorities reports reveal about the direction of supervision

What happened?

Over recent weeks the FCA has published a full set of Regulatory Priorities reports spanning nine retail and wholesale sectors, replacing dozens of individual portfolio letters with a single annual point of reference for boards and senior management.

Insurance focuses on claims handling and evidencing good outcomes across outsourced arrangements; consumer investments on building a stronger investment culture and fair value; pensions on helping consumers plan confidently and improving scheme value for money.

Retail banking addresses access to essential services and branch closures; mortgages centre on the Mortgage Rule Review; consumer finance looks at forbearance and affordability; wholesale buy-side, wholesale markets and payments all point to evidence, resilience and third-party oversight.

Why does it matter?

Across all nine reports, the FCA is signalling a move towards more predictable, proportionate supervision, paired with a firmer expectation that firms can evidence how their frameworks operate in practice.

The recurring message is that policies, controls and governance documented ‘on paper’ are no longer sufficient; outcomes, data and demonstrable oversight now matter more.

For boards, that changes the reports from background commentary into a baseline for evidence, challenge and prioritisation over the year ahead.

Who is affected?

The reports affect firms across all nine sectors named, but the FCA is explicit that boards and senior management, not just compliance functions, are expected to engage with them directly.

Firms with outsourced or delegated arrangements, third-party dependencies, or complex product ranges face particular attention given the consistent focus on oversight and evidencing outcomes.

Key risks

• Treating the reports as commentary rather than acting on the ‘what we expect firms to do’ sections.
• Relying on documented policies and controls without evidence that they function in practice.
• Weak oversight of outsourced, delegated or third-party arrangements.
• Boards not engaging directly with sector-specific priorities relevant to their business.

Actions to take

1. Read the report for your sector and treat the ‘what we expect firms to do’ section as an action list.
2. Review how outcomes are monitored and whether management information supports genuine challenge.
3. Strengthen oversight of third-party and outsourced arrangements where these are flagged.
4. Build or refresh evidence frameworks that can withstand supervisory scrutiny.

Wider implications

The shift to a single annual report per sector suggests the FCA wants supervision to be more predictable and less reliant on ad hoc portfolio letters, but the trade-off is a clearer expectation of evidence.

As this evidential discipline becomes standard across sectors, firms that cannot demonstrate how their frameworks operate in practice are likely to face earlier and more focused supervisory attention.

Recommendations

Use each sector report as a structured checklist for self-assessment rather than a one-off read, and revisit it when planning assurance activity for the year.

Focus particularly on strengthening how outcomes are monitored and how oversight of third parties and outsourced functions is evidenced, since these themes recur across almost every report.