Publishing its Business Plan for 2007-8, the regulator also claimed the lack of financial education for the public was one of the biggest risks to the financial services sector.
John Tiner, chief executive of the FSA,
said: “More PBR will produce significant benefits for firms, markets and consumers but we need to invest in our people and information systems to realise this change. This will result in an FSA that is better equipped to face future challenges and to deliver better outcomes for all our stakeholders.”
As part of the move, the FSA has allocated £50 million to be spent on systems and people over the next three years; money which will be amortised from firms over the next 10 years.
The FSA admitted the marketplace today was as dynamic as it has ever been but warned more needed to be done to educate consumers.
Tiner added: “Lack of financial understanding among consumers has been recognised as a priority risk by the FSA and the need for more confident, capable consumers who can take advantage of a more dynamic market has never been greater. We have set our targets but we need this additional investment to achieve them.”
Chris Lawrenson, head of legal services at the Building Societies Association, commented: “We have been in favour of PBR for a long time. There are a large number of fair play rules which overlap so currently the system is a bit of a mess so to treat customers fairly will be easier. We also strongly support the move to educate the public in financial services but basic number skills need to be taught in school. It is not the job of the FSA or other financial institutions to do so.”
