The Financial Conduct Authority (FCA) sees new payment services a big concern for the financial services market.
Talking on the major concerns in the market, the FCA said payment solutions have some products do not have protections in place for consumers. It went on to explain that some e-money services which are advertised as “current accounts” are not covered by the Financial Services Compensation Scheme,
The FCA released its new Sector Views which explores the impact of macroeconomic developments and common drivers of change across the financial market.
Another issue in the market, according to the FCA, is that insurance firms are still penalising loyal customers in their pricing structures. It said that in 2018, six million longstanding consumers were cost an extra £1.2bn due to these loyalty penalties.
High-risk retail investment products are also posing a challenge, as they are exposing consumers to more risk than they can handle.
FCA executive director of strategy and competition Christopher Woolard said, “We are committed to reducing harm in the markets we regulate. Our analysis of markets ensures that we do this effectively, helping us to decide where to focus our attention. We expect firms to be similarly focused on preventing harm and assisting us where they can, and we will continue to actively supervise all firms to ensure they achieve this.
“What is clearly apparent from the Sector Views, is that many of the harms we are seeing are created by a significant number of smaller firms we regulate or firms beyond our remit.
“The findings in the report will contribute to our upcoming Business Plan and the decisions we make affecting consumers, market integrity and competition.”
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