The Financial Conduct Authority’s (FCA) new chief executive Nikhil Rathi has said that the regulator will be focusing on the risks involved with higher-return investments, as he set out his strategy.
Speaking on the City watchdog’s Inside FCA podcast, Rathi said the regulators remains “very vigilant” to the risks faced by consumers in a low interest rate environment.
“It’s only natural that consumers are going to be looking for higher returns and also as people have more flexibility over how they deploy their savings, there’s also the opportunity to take more risk as well,” Rathi said.
“That can mean being exposed to scams particularly online and sometimes fraudulent activity and we’re going to be very vigilant around those activities too.”
He didn’t name any products specifically but the FCA has a history of lumping P2P lending into the risky end of financial services.
Rathi also acknowledged that there was a growing risk of regulated firms failing during the pandemic.
“We cannot stop some of the firms that are under FCA oversight from failing,” he said.
“We are not nor should we be a zero-failure regulator.
He added that in those circumstances, the FCA will work to “ensure that risks are managed and consumers are adequately protected.”
Rathi replaced Andrew Bailey who became Bank of England governor earlier this year.