At the Fair4All Finance “Delivering Financial Inclusion Together” conference, Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA) in the United Kingdom, introduced a refreshed direction for financial inclusion. His core message was simple: giving people access to financial products is only the starting point. Real inclusion depends on people's capability and understanding to confidently use the tools available to them.
A Growing Capability Gap
Rathi described this moment as “pivotal” for both inclusion and capability. He warned that when a person has access but lacks the knowledge to make sound decisions, small choices can create large problems.
He shared stories that reflect what many people experience today. One person living with multiple debts, caring responsibilities and health issues felt overwhelmed by the financial system and unable to find a trusted path out of debt. A volunteer at a debt charity said many people don’t feel confident enough to even call their creditors when they are in crisis.
These examples show why access alone (such as being able to open a bank account or download a mobile banking app) does not guarantee good outcomes. Without the knowledge of how to use them, financial products and services can leave people feeling confused and overwhelmed.
From Access to Informed Decisions
Rathi recognised that the industry has made real progress. Ten years ago, many people struggled to open basic bank accounts. Today, account access is far more common, digital banking has expanded, and cash access has been protected.
But he also highlighted important gaps. According to FCA research:
- 67% of renters do not have contents insurance
- 1 in 10 adults do not feel confident identifying a scam
- This rises to 16% for adults from households earning less than £15,000 a year, and 17% for people over 75
These numbers show that more choice does not automatically translate into safer or better decisions. For the FCA, the next step is ensuring people can engage with financial products at key life moments – from borrowing to savings to retirement – without confusion or risk.
Building Capability into Product Design
Rathi stated that the FCA is well positioned to remove barriers that prevent firms from supporting customers. He pointed to the FCA’s innovation services, research like the Financial Lives survey, and behavioural-insights work that helps explain how people make financial decisions.
But capability cannot be treated as an afterthought. Consumer education must be built into products from the beginning. Some firms already design with user understanding in mind. Others rely on last-minute fixes, which can leave customers confused and exposed to harm.
To support industry progress, the FCA plans to bring inclusion and capability closer together. It will build a shared evidence base, review existing studies, commission new research and publish results so that firms, regulators and industry bodies can align their work.
Balancing Regulatory Risk and Innovation
Rathi also addressed the balance between innovation, access and protection. He acknowledged that some of the FCA’s new targeted-support measures may lead to poorer outcomes for a small number of customers. But doing nothing would leave millions without support when making key financial decisions.
He gave one example from the mortgage market: the FCA clarified its stress-test rule. This allowed lenders to responsibly extend around £30,000 more in borrowing power. Rathi described this as a calculated risk that could help more people achieve the stability that comes with home ownership.
For compliance and risk teams, this signals an evolving regulatory environment. Frameworks will need to stay flexible, with a strong focus on customer outcomes and cultural alignment.
Clear Expectations for the Ecosystem
Rathi outlined what he expects from each stakeholder group:
- Government: Lead and coordinate the national approach. After publishing its Financial Inclusion Strategy, it must focus on turning ambition into measurable results.
- Industry: Continue building products that support understanding from the start, not as a late add-on.
- FCA: Convene the sector, share evidence, provide clarity and promote responsible innovation.
What It Means for Compliance and Risk Leaders
Firms should review their product lifecycles to ensure capability-building features are present at every stage, from design to delivery to monitoring. Metrics also need to evolve. Instead of gauging success based on the number accounts opened or digital users, firms should focus on outcome metrics such as consumer confidence, complaints and signs of harm avoided.
The FCA’s openness to calculated risk means compliance frameworks should stay agile and scenario-aware. Cross-sector collaboration will also grow in importance as regulators and firms share data, evidence and standards to scale what works.
Conclusion
Rathi ended with a clear message: inclusion gives people access, but capability empowers them to use that access wisely. When both are present, households become more resilient and the wider financial system becomes more stable.
For governance, risk and compliance professionals, this marks the next phase of financial inclusion: one focused not just on availability, but on real, measurable outcomes. Firms that embed capability into products from the outset will be better prepared for the regulatory expectations ahead and better equipped to build trust across the industry.
Lead With Confidence in a Changing Landscape
Capability and inclusion are reshaping regulatory priorities. CUBE helps you move beyond reactive compliance to proactive strategy, ensuring your frameworks deliver real results for customers and regulators alike. Speak to our team to learn more.