Regulatory Roundup for 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/