Yesterday, the FCA published long term proposals to use greater automation of data collection and intervention based on data analysis as two key drivers of regulatory strategy over the next five years.
The watchdog will invest heavily in improving its data collection and base future intervention on data analysis to flag up problems earlier. A new Gabriel reporting system for regulated firms already under development is part of the ‘refreshed’ data strategy.
The PFS has responded that while collecting data is an important part of regulation it will not prevent “consumer detriment alone.” A human touch is needed, it said.
Keith Richards, chief executive of the Personal Finance Society, said: “It is vital that the regulator has the right data to inform rules but data alone isn’t enough to prevent future consumer detriment.
“It is vital data is accompanied by human insight to ensure developments in the market are thoroughly understood. Digital breadcrumbs can't replace the knowledge gained by speaking to those who assist consumers.
“There is also a danger that a desire to streamline data collection might mean that different assets might be treated as the same, simply to create large ‘buckets’ for counting in a standardised way across the sector. This, in turn, might lead to an over-simplified view of the market.
The PFS welcomed moves to make data collection from regulated firms easier.
Mr Richards said: “I am pleased the regulator will work with firms to ensure data collection is less burdensome. The regulator needs to ensure the market understands how this information will be used.”