Financial Services Licensing in 2022

2022 has been a hell of a year so far for the financial sector. The FCA have made some very important and crucial decisions that have affected the sector massively. Financial services licensing is a major talking point with what is set to happen within 2022. What else is going to occur within the financial sector in 2022? Read on to find out.

New customer duty

The FCA implemented a new plan in 2021 that ensured a new customer duty was coming into action. This was set to up the standards of care that firms currently provide to their consumers and will consist of different elements such as:

A new consumer principle – The past FCA principles 6 and 7 for retail businesses, required firms to deliver good outcomes for retail customers. Now, the FCA are ensuring that principle 12 will retain this even further. Also, it means that cross-cutting rules to help develop standards can occur to ensure maximum satisfaction. The FCA hope that in 2022, we will see more outcomes around communications, products and services for customer satisfaction.

Financial promotions

Financial promotions will almost certainly see some changes arise over the next few months. The financial services and markets act 2000 (FSMA), is set to be tweaked so that the FCA has almost full say in what is being put out to the public. There will be a lack of exemptions in this ban, for example, for an authorised company to approve promotions for their own groups, they must approve their AR’s in relation to matters for which the principal takes the regulatory responsibility under the AR agreement. Financial licensing will further have a part to change within this as they must take all of these issues into consideration.

Regulation of funeral plans

Funeral payment plans will also be under the scope of the FCA tirelessly, if you want to carry out a pre-paid funeral plan, then you must ensure that it is:

  • Authorised by the FCA directly with one or two permissions such as being a provider in your funeral plan.

Even then, once they have been approved by the FCA, they must continue to follow the set rules that have been laid out for them through the ‘’Funeral plan: Conduct of Business Sourcebook (FPCOB), alongside other obligations. The rules will include a ban on cold calling and ensuring that advertising standards are being met, a ban on instalment products and a ban on commission payments to intermediaries.

Buy-now pay-later (BNPL) regulation

In 2022, we are almost certain to notice a regulation of interest free BNPL products. Previously, the treasury’s consultation explored how to regulate such products, and analysed that there was a connection between BNPL and other interest-free credit. The treasury came up with a couple of options to combat this: They could restrict the interest-free credit agreements that use third party lenders and keep arrangements between merchant and consumer. They also discussed defining a BNPL agreement as one which involved a pre-existing relationship between the lender and the consumer.

Klarna, a product that is growing increasingly popular over the last year or so has been under the scope. They have announced that they are making changes to its BNPL service ahead of regulation. They have taken their own initiative and included a pay now option beside their purchasing options. Keeping them safe from any regulation laws that are most likely going to come into action.


It is clear to see that many changes will occur in both the financial sector and licensing in 2022, make sure you keep your eyes peeled as some of these may affect you or your own business.

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