FCA report reveals technology change's significant impact on consumers and the market

The Financial Conduct Authority (FCA) has released a report about financial technology change's impact on consumers and the market. The report reveals that failed technology changes are one of the main causes for operational disruption within firms, accounting for a quarter of all high severity incidents that cause harm to consumers and the market.

In the report, FCA found that changes made by firms with strong governance and risk management strategies are more successful, that robust testing is an important part of the change process, and while testing automation has benefits it also presents challenges. They also found that pairing subject matter expertise with a clear understanding of a firm's strategy is vital.  

As the regulator mentioned in its press release, firms can work towards reducing the disruption caused, making themselves and the wider industry more resilient. And while the coronavirus pandemic has caused some delay to planned technology changes and system updates, it is very important for firms to understand how technology change activity can affect the services they provide, and invest in their resilience to protect themselves, consumers and the markets. This is especially important as firms increasingly use remote and flexible working.

The report intends to support discussions on how to reduce the frequency and severity of disruption due to technology change activity. Firms should consider the findings when assessing their future technology changes. This includes investing in technology to protect themselves, consumers and the markets.