This week, the Financial Conduct Authority (FCA) and the Bank of England press forward on two of the most pressing challenges in financial services: supporting consumers through long-term structural change, and maintaining the governance and resilience of the systems that underpin the UK economy.
We lead with an FCA speech framing housing equity as the fourth pillar of retirement funding. With 15 million working-age adults facing retirement income shortfalls and housing wealth set to reach £4.3 trillion by 2040, the FCA is clear that industry must act. If it does not, others will shape this market instead. This sits alongside the FCA's broader mortgage accessibility programme and matters to any firm serving customers with long-term financial planning needs.
Elsewhere, the FCA's enforcement and market oversight directorate sets out its whole-system approach to financial crime — a reminder that supervisory scrutiny, not just headline fines, is the primary deterrence tool.
Meanwhile, CP26/19 signals a sharper enforcement posture: minimum market abuse penalties for individuals will rise for the first time since 2010, and the FCA proposes to take individual wealth into account when setting penalties for deterrent effect. The penalty framework will also extend to cryptoasset market abuse.
We conclude this week with two operational updates: the FCA's new annual retail banking data return, with a first submission deadline of November 2026, and the Bank of England's updated governance and operational resilience Code of Practice for payment system operators, which came into force on 12 June 2026.
The FCA has called on the later life lending market to treat housing equity as the fourth pillar of retirement funding, alongside the state pension, workplace pensions and personal savings. Speaking at the Later Life Lending Summit on 16 June 2026, Emad Aladhal, director of retail banking, said housing wealth continues to be treated as an option of last resort. By 2040, research suggests 51% of households aged 60 and over could benefit from accessing housing wealth estimated at £4.3 trillion, against a backdrop of 15 million working-age adults facing retirement income shortfalls.
The FCA is consulting on retirement interest-only affordability and is running a focused market study on the later-life mortgage market. Aladhal warned that product innovation must translate into genuine consumer value, not greater complexity. He was clear that if industry does not shape this market, others will.
Firms should engage with the FCA's market study and attend planned workshops this summer on holistic advice.
Read more on later life lending
The FCA has set out its approach to combating financial crime, warning that it is becoming faster, more complex and more widespread. Speaking at the International Bar Association Anti-Corruption Conference on 17 June 2026, Therese Chambers, joint executive director of enforcement and market oversight, described the FCA's response as whole-system: enforcement, supervision, market oversight and proactive detection working in concert. She stressed that a credible threat of enforcement deters harm before it escalates, but that supervisory and detection work carries equal weight.
The speech signals that headline fines are only part of the picture. Chambers called for closer collaboration between regulators, law enforcement and industry to close the gaps that criminals exploit. Firms across all sectors should treat this as a clear signal that the FCA will use its full toolkit, not just enforcement action, to address financial crime.
Firms should review the robustness of their financial crime controls, governance frameworks and detection capabilities in anticipation of heightened supervisory scrutiny.
Read more on beyond FCA approach to combating financial crime
The FCA has published consultation paper CP26/19, setting out targeted updates to its penalty and decision-making framework. Key proposals include raising the minimum individual penalty for serious market abuse from £100,000 to £150,000, a level unchanged since 2010. The FCA also proposes to make clear it may increase penalties beyond what relevant income alone would indicate, where the individual's wider wealth warrants a stronger deterrent. Treatment of deferred bonuses and shares in penalty calculations will be clarified, in line with recent Upper Tribunal decisions.
The proposals also update financial hardship thresholds, which have not changed since 2010, and link them to inflation going forward. On decision-making, the FCA proposes to revise settlement processes for cases referred from Market Oversight and to extend its penalty framework to cover cryptoasset market abuse under new 2026 regulations.
Responses are due by 10 August 2026.
Read more on FCA consultation paper CP26/19
The FCA has confirmed a new annual reporting return for retail banks and building societies, replacing its previous ad hoc collections of Retail Banking Business Model (R2B2) data. Policy Statement PS26/8 was published on 29 May 2026, with rules in force from 1 June 2026. The return covers seven segments: residential mortgages, personal banking, personal lending, small business banking, other business banking, wholesale funding and whole business measures, alongside an off-the-shelf document request for items such as product offerings and business plans.
The FCA estimates 36 firms are now in scope, including eight newly in scope firms. The number of data points has been reduced by 30% compared to the 2024 ad hoc request, following extensive industry engagement. Data will be shared with the Prudential Regulation Authority (PRA) and the Competition and Markets Authority where appropriate.
The first submission deadline is end of November 2026. Firms newly in scope should act now to assess data readiness, confirm group reporting obligations and document any estimation methodology.
The Bank of England has updated its governance and operational resilience requirements for recognised payment system operators (RPSOs) and specified service providers (SSPs). The revised governance provisions came into force on 12 June 2026, setting minimum requirements for board composition — including at least one-third independent non-executive directors, and requiring RPSOs to manage systemic risk across both direct and indirect participants.
On operational resilience, RPSOs and SSPs must produce an Operational Resilience Framework, set impact tolerances for each important business service, and conduct end-to-end testing. The updated outsourcing and third-party risk supervisory statement also now applies, requiring annual registers of material third-party arrangements to be submitted via the FCA's RegData platform. Non-UK entities may receive a direction from the Bank limiting the scope of the Code where an equivalent home-country framework applies.
RPSOs and SSPs should review board composition, framework documentation and third-party registers without delay.
Read more from Bank of England on policy statement and supervisory statement
Read more from Bank of England on operational resilience supervisory statement
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