The FCA published its first Retail Banking Regulatory Priorities report in March 2026, inaugurating the new sector-specific format that replaces the previous Dear CEO letter system. The report provides retail banks and building societies with a clear statement of the FCA's supervisory focus areas for the year ahead. This article summarises the key themes and their practical implications.
Access to Cash and Essential Banking Services
The FCA identifies access to cash and essential banking services as a primary concern for the retail banking sector. As banks continue to close physical branches and migrate services to digital channels, the regulator is focused on ensuring that customers — particularly those in rural areas, elderly customers, and customers with limited digital access — are not excluded from essential financial services.
Banks must demonstrate that their branch closure decisions have been preceded by adequate assessment of customer impact and that alternative access arrangements (Post Office services, cash machine networks, mobile banking facilities) are genuinely accessible. The FCA will be monitoring customer complaint data and access metrics to identify firms where digital migration is outpacing customer readiness.
Consumer Duty: Moving to Outcomes Testing
The Consumer Duty is now in its second full year of implementation, and the FCA is shifting from assessing whether firms have implemented the Duty to testing whether the Duty is delivering good outcomes in practice. For banks, this means:
Fair value assessments must be evidence-based and regularly reviewed. Banks must demonstrate that the prices charged for products and services are proportionate to the benefits provided, and that any cross-subsidisation does not result in particular customer groups paying disproportionately.
Customer communications must be clear, fair and not misleading. The FCA is conducting mystery shopping exercises and reviewing customer journey data to assess whether communications genuinely support customer understanding.
Customer support must be accessible and effective. The FCA is monitoring complaint resolution times, channel availability and customer satisfaction data.
Financial Crime Prevention
Financial crime prevention remains a high-priority area for retail banks. The FCA's focus in 2026 includes:
APP fraud prevention and reimbursement. Following the introduction of mandatory reimbursement for authorised push payment fraud, the FCA is assessing whether banks are implementing effective fraud prevention controls (confirmation of payee, transaction delay mechanisms, customer warnings) and whether reimbursement processes are operating fairly.
Sanctions compliance. Banks must maintain robust sanctions screening across all customer onboarding and transaction processes, with particular attention to evolving sanctions regimes.
Suspicious activity reporting. The FCA expects banks to maintain effective systems for identifying and reporting suspicious activity, with quality of SARs as important as quantity.
Supporting Vulnerable Customers
The FCA expects banks to proactively identify and support vulnerable customers. This goes beyond reactive responses to disclosed vulnerability — banks must design products, services and processes that anticipate and accommodate vulnerability. The FCA is assessing whether banks have effective vulnerability identification frameworks, whether frontline staff are adequately trained, and whether vulnerable customers receive appropriate support at key moments (account closure, debt collection, product changes).
What Banks Should Do Now
- Review the Retail Banking Regulatory Priorities report and map each priority to your current compliance posture.
- Assess your access to cash strategy against the FCA's expectations, particularly if you have undertaken recent branch closures.
- Conduct Consumer Duty outcomes testing across your product portfolio — move beyond implementation assessment to evidence of good outcomes.
- Review APP fraud prevention controls and reimbursement processes.
- Evaluate your vulnerability framework for proactive identification and tailored support.
Regulatory Counsel advises banks and building societies on FCA compliance strategy, Consumer Duty implementation and regulatory priorities alignment. Contact us for a free initial consultation.
Frequently Asked Questions
Published in March 2026, it is the FCA's new sector-specific report setting out priority focus areas for retail banks and building societies, replacing the previous Dear CEO letter format.
Access to cash and essential banking services, Consumer Duty outcomes testing, financial crime prevention (particularly APP fraud), and support for vulnerable customers.
The FCA is moving from implementation review to outcomes testing — using data analysis, mystery shopping and complaint monitoring to assess whether good outcomes are being delivered in practice.
Banks must reimburse victims of authorised push payment fraud under the mandatory reimbursement regime, and must implement effective fraud prevention controls to reduce fraud occurrence.