WHEN Nikhil Rathi took over as chief executive of the Financial Conduct Authority (FCA) in October 2020, he inherited an organisation at a crossroads. Nearly five years into his tenure, Rathi has transformed the UK’s financial watchdog into an assertive, technologically adept, and – some would argue – more controversial force in financial regulation.
Yet, as he has often stated, being popular is not his goal. “I have not applied for this job to be liked,” he told MPs five years ago, and his tenure has been defined by bold reforms, digital innovation, and a relentless drive to strike the delicate balance between consumer protection and economic growth.
Born in 1979 to Indian immigrant parents, he grew up in Barrow-in-Furness, a working-class town in Cumbria, where they were pretty much the only Indian family at the time. “But it was a warm, hospitable and very kind community,” he recalled in an interview with The Times.
Tennis became his passion – by 11, he was Cumbria’s under-12 champion. He even dabbled in stock trading as a teenager, using his winnings from junior tournaments to make high-risk punts on penny stocks, a precocious foray into the world of finance that would later define his career.
“I guess this was breaking all the rules,” he admitted in the interview. “There were a few wins. There were a fair number of losses as well. It was a good learning experience.”
After studying Philosophy, Politics, and Economics (PPE) at Oxford, Rathi quickly climbed the ranks of government. He joined the Treasury in October 2002, where he held a number of roles, culminating in him being the director of the financial services group from November 2009 to April 2014. During his time at the Treasury, he was seconded to 10 Downing Street as private secretary to prime ministers Tony Blair and Gordon Brown.
He later became chief of staff and then chief executive at the London Stock Exchange, overseeing a period of international expansion before being tapped by the Treasury to take the reins at the FCA.
Rathi arrived at the FCA during a turbulent period. The UK was still adjusting to its post-Brexit regulatory landscape, fintech was booming, and scandals like the London Capital & Finance collapse had shaken public confidence in financial oversight. From the outset, Rathi made it clear that the FCA would be more proactive in tackling misconduct and adapting to rapid changes in the financial sector.
Under his leadership, the FCA has significantly increased its enforcement activities. Nearly 20,000 fraudulent financial promotions were withdrawn or amended in 2024, following intervention from the FCA – nearly double the amount in 2023 and up from just 500 four years prior. It has also cracked down on misleading ‘finfluencers’ and crypto scams, recognising the shifting landscape of financial misconduct in the digital age.
For years, the FCA had been perceived as an impediment to business growth, particularly by the City firms. Rathi has worked to change that perception by championing policies aimed at making the UK a more attractive hub for investment. In July 2024, the FCA simplified its listing rules, reducing regulatory red tape to entice more companies to go public in London.
“The new rules involve allowing greater risk,” the FCA acknowledged, but Rathi believes this is necessary to attract investment and drive economic growth.
The regulator also announced a sweeping review of its rulebook last year, aiming to reduce regulatory burdens on firms while maintaining strong consumer protections. This move followed the introduction of Consumer Duty in 2023, a landmark policy that requires firms to prioritise good outcomes for customers when they buy financial products and services.
“The Consumer Duty marked a major shift for firms and consumers by setting higher and clearer standards of consumer protection and requiring firms to put their customers’ needs first. We now want to seize the opportunity of the Duty and the move to a clear outcomes-based approach to streamline our rulebook, lowering costs for businesses and supporting the competitiveness and growth of the economy,” Rathi said, launching the review.
At the same time, he has sought to modernise the regulator itself. His push for digital transformation has led to the FCA ingesting a billion financial records per day – double what it processed just a few years ago.
“We all need to invest in technology to make it easier to share data and ease regulatory burdens. Our move to the cloud and use of large language models means we can analyse it quicker,” he has said.
One of the most significant developments under Rathi’s watch has been the FCA’s approach to cryptocurrency regulation. In November last year, the FCA unveiled plans for full regulatory oversight of the crypto sector by 2026. This move comes amid surging demand for digital assets like Bitcoin, which has seen both dramatic gains and devastating losses in recent years.
His focus on digital inclusion has been equally strong. Noting that 1.1 million Britons still lack a bank account, he has pushed for wider access to financial services, particularly through fintech innovations. “To be included financially, requires inclusion digitally,” he argues, pointing to initiatives like India’s unique biometric ID system Aadhaar and Brazilian Central Bank’s instant payment service Pix as models for the UK.
As Rathi approaches the end of his first term in September this year, speculation about his future is rife. Did he throw his hat in the ring to become cabinet secretary in 2024? “I did,” he confirmed, though he was quick to add, “I’m really enjoying what I am doing.”
Whether he stays on for a second term or moves on to new challenges, Rathi’s impact on the FCA and the UK’s financial landscape is undeniable. As he himself might say, getting the serves right makes the volleys much easier.
