The Financial Conduct Authority says it recognises the way the FSA collected data from firms was poor and has promised it will address the “data and information legacy it inherited”.
The regulator has published a “data strategy” paper today on how it will manage and use the information it collects from firms.
The FCA says it recognises that in the past the FSA did not always request data from firms in a “clear and effective way”.
It says: “We have listened to the firms we regulate, who told us there are a number of failings, including: too many requests for data and information without a clear information about why it was needed; unreasonable timescales, resulting in firms needing to divert resources to meet our requests; and a failure to communicate what the data and information was used for, leaving firms questioning if it was used at all.”
The FCA also says it recognises that the FSA did not have the internal checks to identify everything that was being asked of firms, and lacked the necessary technology to store and use the data it had appropriately.
The FCA says: “This is the data and information legacy that we have inherited and we are committed to addressing it. However, overcoming this legacy will take time, as much of the data and information we hold and continue to collect was initiated by and for the FSA, and our current data handling capability was defined by it.”
The regulator says it will put in place controls so data collection is constantly reviewed and stopped where it is no longer needed. It pledges to make data requests “clear and unambiguous” and link these to the regulator’s objectives.
A new data and analysis department has been set up to better manage data within the FCA. The FCA says the challenge in overhauling the way the regulator collects data is “substantial”, and may require “significant investments in technology.”
Before it commits any money, the FCA will test a new data management model to show it would improve data collection. It has chosen the UK retail investment market as a test case and will report its findings next September.
The news that the FCA is examining how to collect data better comes follows calls from adviser bodies for an urgent review of the retail mediation activities return.
Apfa, the Personal Finance Society and IFA Centre have raised concerns that complying with the RDR is putting undue pressure on advisers, particularly smaller firms, and that it is not clear why certain information is being requested.