FCA sets out consumer credit reform agenda for a more resilient UK market

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FCA consumer credit reform UK

Highlights

FCA director Alison Walters outlined a regulatory roadmap at Credit Week, urging joint action to build a cohesive and trusted UK credit market.
The Financial Services and Markets Bill has been introduced, and the FCA plans to consult on key consumer credit framework reforms previously enshrined in legislation.
FCA will regulate Buy Now Pay Later for stronger consumer protections, emphasizing tech-driven supervision to ensure resilience and sustainable borrowing across the sector.

Regulatory roadmap for credit market reform

As outlined in a speech by Financial Conduct Authority director of consumer finance Alison Walters at the Credit Week: Powering the Future of Finance event, the regulator is calling for collective action across firms, policymakers, trade bodies and consumer groups to build a more cohesive and trusted credit market.

Walters says consumer credit remains vital to the real economy and everyday life, helping households manage pressure and access opportunity, but argues the market must adapt as products, distribution channels and consumer needs evolve. She frames the next stage as a transition toward a system that is less fragmented and more resilient in practice, not only in principle.

The FCA says the government has now introduced the Financial Services and Markets Bill, marking the next step in reforming the consumer credit framework. The regulator is working closely with the government and says it intends to consult on key parts of the framework that were previously set out in legislation.

Consumer protection and industry expectations

Beyond avoiding harm, firms are expected to use data, technology and insight to deliver better outcomes for consumers, according to the speech. The FCA's position suggests supervision of the sector is increasingly focused on whether lenders' systems and product design support customers effectively in both good and bad financial conditions.

The regulator also says bringing Buy Now Pay Later into regulation will give consumers stronger protections and support more sustainable borrowing. That step is presented as part of a broader effort to create a credit market that can keep pace with innovation while maintaining trust and durability across the UK financial system.

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