It plans to get back to targeted authorisation service level by March.

In an FCA Authorisation Update this week, the regulator said: “Since December 2021 we have reduced our caseload by around 47% and plan to be substantially meeting the statutory service metrics by the end of 2022/23.”

The recent caseload reduction was achieved by recruiting 95 additional permanent staff, including appointing more financial analysts with market expertise in key areas.

On top of that, the FCA plans to recruit 30 more case officers for its authorisations department in the current financial year to bring the total of new workers to 125.

It is also in the process of introducing two additional heads of department to its casework function, in addition to the creation of a second director role in May 2022.

The regulator admitted failing to meet statutory deadlines in 2021/22 for authorisation applications, money laundering registrations, variation of permission and Change in Control.

However, it said: “The complexity of some cases means that we will not always meet the deadline.”

It blamed incomplete or poor-quality applications for some of the delays. Poorly completed applications were “a particular issue” for Money Laundering Registrations, Payments Services Regulations and Electronic Money Regulations applications.

It added that it had to cope with increased volumes of applications in key areas like Approved Person Status as a result of the expansion of the Senior Managers and Certification Regime.

Authorisations have become more labour-intensive since the FCA increased scrutiny applied at its gateway as a result of the recommendations in the Gloster Review into the collapsed mini-bond provider London Capital & Finance. The watchdog said it now looks for, "financial irregularities and conducts holistic reviews of firms’ business models.”

The independent investigation conducted by Dame Elizabeth Gloster after the £237m collapse of the mini-bond provider found that the FCA failed to adequately regulate the firm. The FCA introduced sweeping reforms following publication of the damning report.

The increased scrutiny of authorisations meant that the number of firms that were not authorised in 2021/22 was 1 in 5, up from 1 in 14 the previous financial year.