Governance, Risk & Compliance

Regulatory Roundup for June 2026

19 June 2026

n this edition of the Kind Consultancy Newsletter, I want to take a look at some of the big topics that have been on the minds of many of the senior Compliance professionals that I’ve recently had conversations with. Together, they give us a good sense of the current regulatory landscape.

Emerging Regulatory Expectations Around AI

AI continues to dominate discussions across all businesses and Financial Services is no exception, with the potential for Artificial Intelligence to reshape the industry as we know it. With that kind of impact there come new regulatory issues.

Back in February we looked at The Mills Review and the FCA’s focus areas and one big picture plan – to adapt existing legislation to handle AI rather than to create new rules – as they considered the potential long-term effects of AI.

Last week, a new article from the FCA’s Head of Cross-Cutting Policy & Strategy gave us an updated glimpse at the regulator’s current work around Artificial Intelligence. Writing on the FCA website, Alex Smith restated that they are “not going to introduce new regulations for AI” and will instead “rely on existing frameworks” with Consumer Duty, SM&CR named as two tools they expect to harness in the future.

The Financial Conduct Authority is continuing to consult the industry on the issue, with current discussion focussed on “how firms oversee and govern AI, how [firms] test models, how [firms] ensure fair treatment for customers” and “how [firms] explain AI-driven decisions.”

Right now, the regulator is inviting Financial Services firms to contribute to their AI Input Zone before June 19th, asking stakeholders to share “AI use cases” and the “challenges or barriers” they’re experiencing. That Input Zone is just one element of the FCA’s AI Lab, which also includes a Supercharged Sandbox and the AI Live Testing program, allowing firms to try out AI ideas.

As Smith says in his conclusion, “AI is evolving quickly and no single organisation has all the answers.” For an industry where this technology is expected to be particularly revolutionary, it’s good to see open communication from the regulator, and it will be interesting to see what we learn when the FCA publish the Mills Review findings later this year.

The FCA’s Horizon Scanning Focus for the Next 12 Months

AI and technological development are definitely going to be part of Horizon Scanning over the next 12 months. What other big regulatory themes do you need to be aware of?

The Motor Finance Compensation Scheme is starting to feel like a storm cloud perpetually looming overhead. With multiple legal challenges, the issue is going to be in limbo until the end of the year – but with the large amount of publicity around Motor Finance Commission Arrangements, firms are continuing to receive very large volumes of complaints. Maintaining good customer relationships and reacting quickly once those lawsuits are decided will be critical for the reputation of Motor Finance firms this year.

Elsewhere in the Consumer Credit space, we are now less than a month away from FCA regulations on Deferred Payment Credit products from Buy Now Pay Later firms coming into effect. From July 15th lenders will need FCA authorisation and will be required to check borrowers can afford their repayments before lending to them as well as being required to provide more information to borrowers before they make a decision. These are hugely popular products, and it will be interesting to see how the sector shifts once it becomes fully regulated.

Consumer Duty: How Is Regulation Moving from Implementation to Practical Outcome Testing?

We are now in the third year of the new Consumer Duty, and it continues to be one of the most crucial regulatory themes for all Financial Services firms. Recently the FCA shared some takeaways from the Year 2 Board Reports, highlighting good practices and areas for improvement.

In comparison with the first year of reports, the regulator found that firms have clearer Board oversight of governance issues, with formal review and approval of reports “including explicit confirmation that they have considered and signed off actions.”

They note that organisations are “increasingly setting out comprehensive action plans” enabling boards to much more efficiently monitor progress. Helping to build those plans is data, with “a wider range of quantitative and qualitative data” being utilised to demonstrate customer outcomes.

Conversely, data is also one of the areas where the regulator would like to see improvements, with some firms presenting wide ranging data without “sufficiently explaining how it demonstrated good or poor outcomes.” The regulator’s Head of Consumer Duty, Jonathan Pearson, notes that Management Information dashboards are not enough – the regulator needs to see analysis that provides true insights.

The regulator also highlighted a need for better monitoring of Third Parties, especially “where firms rely on intermediaries or outsourcing partners.” With some businesses having difficulty in identifying “a proportionate approach,” Pearson notes that the FCA plans to consult on “changes to rules and guidance relating to distribution chains” later this year.

Finally, the regulator noted some Boards were not documenting challenge, making it “difficult to see how senior leaders tested the evidence they were given,” and that some reports were not focussed enough on “customer understanding and support.”

With Consumer Duty now a fundamental part of UK regulation, we expect to see the FCA continuing to push for well documented, provable positive customer outcomes across the industry. This needs to be something that is a continuing and ongoing priority for firms.

UK Cryptocurrency Regulations

The UK is leading the way in cryptocurrency regulation. February saw the government creating the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 which brought crypto into the UK regulatory purview for the first time. On October 25th 2027 those FSMA regulations will come into full force and any business involved in regulated cryptocurrency activities will need to be authorised.

We’re awaiting the FCA’s publication of their Final Guidance, expected this summer, but the next set key calendar date for firms operating in the crypto space right now is September 30th. That’s the day when the FCA’s authorisation gateway will open, allowing businesses who plan to continue crypto activities to begin applying for authorisation in advance. Businesses will need to get that application in before February 28th. On that date firms who have not applied will lose the ability to carry out cryptocurrency activities under the transitional and savings provisions.

Not every possible form of crypto activity will be regulated, many of the most popular ones will be, including operating crypto exchanges and trading platforms, trading and holding crypto on behalf of customers and any lending or borrowing of crypto.

This is a major change for a rapidly growing sector, and I think firms which embrace regulation and create positive compliance cultures are going to be hugely successful over the next 10 years.

Let’s Keep Talking

One of the aspects of my work I enjoy the most is learning about new and developing issues in the space from expertise professional and sharing that knowledge with others. It enhances my personal understanding, and it also allows me to deliver a better, truly consultative recruitment and executive search service.

For a conversation about your talent needs relating to any of these issues, contact us via https://www.kindconsultancy.com/contact/

Collections: What Comes Next?

11 August 2020

Nearly I.2 million people in the UK have made use of Payment Holiday options introduced since the outbreak of the Corona-virus in early spring of 2020. UK Finance has found that approximately 70% of people who took Payment Holidays did not need to for Financial reasons and had done so more as a preventative measure. In isolation, that looks like it means they would be able to pay them back easily. The problem is that as we reach the end of the government-backed furlough scheme and the job market has tightened, with many companies finding themselves not in a position to bring back all their staff, many people are just now entering a period of financial hardship. Suddenly paying back what they owe for their three to six months of Payment Holiday is a lot more difficult.

This will shortly begin to have a knock-on effect on lenders and other Financial Services providers. The work of recovering all the money owed is going to be, for many companies, a large scale project, and one that will require a lot of sensitivity and awareness around vulnerable customers. For customers who were previously designated as vulnerable, questions may be raised about whether they should have been granted Payment Holidays knowing they may be less able to meet later repayments. There will also be many customers who were not classed as vulnerable when they made the decision, but who now find themselves falling within that status and who are unhappy about how that effects their treatment and their ability to access products.

So far, some of the UK’s biggest banks have set aside over £6 billion to cover the expected bad debts arising from individuals and companies who can’t repay loans and mortgages. Figures released by HM Treasury show 1.13 million businesses have been supported by finance from lenders because of Coronavirus. While those loans have been backed by the treasury, theoretically removing risk to lenders, some have raised concerns about the damage that could potentially be done to the reputation and standing of commercial lenders who have to pursue struggling small businesses for repayments.

Anyone working on collections and debt recovery over the coming months will need to be empathetic, active listeners who can carefully handle emotional customers in very difficult situations. That’s a difficult task, and it will be harder still to have these interactions in a way that retains these customers as brand loyal for future business. We know the FCA has made Vulnerable Customers a focus area for this year, so businesses are going to need to handle this well or they could be facing intense regulatory scrutiny. In late July the FCA published new guidance to help firms in this area, which identifies four key drivers for establishing vulnerability: health conditions or illnesses that affect the ability to carry out day to day tasks, a low ability to withstand emotional or financial shocks, recently experiencing a major life event such as bereavement or job loss, and low knowledge or understanding of financial matters and related digital and literacy skills. Clearly, in a still-ongoing global pandemic, many more people than before will sadly fit into those first three categories, whether due to being infected themselves, having lost or being consumed with worry about unwell friends and relatives or because they have lost their job and their previously reliable source of stable income.

We may also need to be concerned about staff who are currently working from home. While remote work is an important way of reducing infections, there are downsides to it that become clear in the face of this kind of highly sensitive, complex work. Staff working from home may not be checking in with colleagues and managers as regularly, and it can lead to them unconsciously relaxing their normally stringent work practices and that’s on top of practical distractions like children and pets which aren’t a factor in the office. All of this could be made worse by the stress of the situation – staff know these are high priority complaints that need to be handled correctly to avoid escalation, and they may feel pressured to quickly make decisions without properly considering the full context of a customer’s situation.

It falls to Senior Managers to make sure that teams are not just aware of vulnerable customers, but that an understanding of vulnerability is built into processes and procedures. Firms may feel that technology-led approaches have set them up to succeed here – and while that may be cost-effective, it could be to the detriment of the customer, both in terms of a lower quality customer experience without that human, emphatic element, but also, some vulnerable customers have that status because they don’t have access to or reasonable understanding of technology.

There are questions to be asked across both retail and commercial lending right now: is your collections capacity ready? Kind Consultancy is in contact with clients across the Financial Services space and we know some lending businesses are already dramatically scaling up their Collections capacity, while others are hoping to move in staff from other parts of the business. However, with Complaints also looking to have a spike in the coming months, organisations may find that their staff who are best prepared to deal with customers in debt and in a difficult situation are stretched to breaking point. Others still have recognised that the staff they do have simply do not have the necessary training, knowledge or experience around vulnerable customers, meaning that especially in a high-pressure time, there’s huge scope for complaints-generating interactions.

Kind Consultancy is already working with a number of firms in this area, with our Kind Agile Solutions service, we have a bench of pre-screened contract talent, including a number of Collections professionals. Our KAS team members are regularly re-screened by Kind to make sure their qualifications are up to date, we make sure they have industry-best knowledge and experience and many of them have worked together before so we can install a full team who t already have a strong team working ethic they’ve built up together, enabling them to truly hit the ground running and rapidly get to grips with the Collections situation in your business. These are professionals who have the knowledge and experience that firms need in order to appropriately take care of customers during this very difficult time.

For a confidential discussion about your Collections resource needs, contact Selena Tye on 01216432100 or e-mail selena@kindconsultancy.com

Governance, Risk & Compliance: This Year’s Big Topics?

11 February 2019

In the first few months of the year, there’s always a lot of prognostication in the Governance, Risk & Compliance world about what the year’s big Compliance issues will be. The biggest changes are always ones we don’t see coming and don’t already have a plan for, but here are a few of the trends I think we’ll be talking about across 2019.

With the FinTech world continuing to expand at an explosive rate, we’re going to see a lot of businesses looking to automate as much of their AML and KYC process as possible to keep up with their increasing user bases. The businesses that can get automatic on-boarding systems in place that are easy to use for their customers, as well as efficient and accurate for themselves, will have a huge advantage over their competitors.

More generally, technology will continue to be at the frontline of AML – in the FCA’s financial crime report, almost all of the types of frauds that top firms reported as being most prevalent last year were tech-based, including Vishing, Malware, Hacking and Account Takeovers.

Cryptocurrency is still controversial in the finance world, with some believing it’s the future of the industry and others seeing it as a pipe dream that will never fulfil its promise. For now, though, no one can deny that there is an increasing amount of activity involving crypto, and 2019 will see many governments introduce formal regulation around the technology, with the international intergovernmental organisation FATF planning to release a set of AML standards covering cryptocurrency in June.

Just this month we’ve seen a situation showing how unprepared traditional regulation is for some unique aspects of cryptocurrency with the death of QuadrigaCX’s CEO resulting in users of their exchange losing access to millions of pounds worth of bitcoin. At the time of writing it’s unclear if their customers will ever get their money back, a situation which would be unthinkable for a bank or building society. As crypto continues to try to move away from its controversial early image, it will be interesting to see how the sector reacts to efforts that aim to bring it more in line with traditional finance.

Kind Consultancy maintains a database of industry-leading Governance, Risk & Compliance professionals who are ready to join your organisation in permanent or contract positions to help keep your GRC strategy efficient and up to date. Contact us on 121 643 2100 or e-mail info@kindconsultancy.com for a discussion of how we can help.

Regulatory Roundup for June 2026

Collections: What Comes Next?

Governance, Risk & Compliance: This Year’s Big Topics?

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