THE WARNING landed in the heart of the City with unusual urgency. Addressing financiers gathered in London in 2025, Nikhil Rathi argued that the financial system itself had become a front line of modern conflict.
“Conflict today hits balance sheets, funding, markets and consumers as much as any battlefield,” he said, urging investors and lenders to think of finance as part of national security infrastructure.
It was a striking moment from the chief executive of the Financial Conduct Authority – a regulator more commonly associated with consumer protection than geopolitical strategy. Yet the speech captured something essential about Rathi’s influence: his belief that the rules governing financial markets must evolve as quickly as the risks surrounding them.
From the FCA’s headquarters at 12 Endeavour Square in Stratford, east London, Rathi now oversees the conduct of more than 40,000 financial firms and the integrity of markets that underpin Britain’s position as one of the world’s leading financial centres. His power lies not simply in the breadth of that remit but in how he has reshaped the regulator’s priorities during a period of rapid economic and technological change.
Over the past year, the FCA has taken several headline-grabbing actions that illustrate that approach. In October 2025 the regulator proposed a vast compensation scheme for consumers who had been mis-sold car finance. The programme could require lenders to pay around £8.2 billion in redress to customers affected by unlawful commission arrangements, covering roughly 14 million agreements.
Rathi framed the intervention bluntly: “Many motor finance lenders did not comply with the law or the rules. Now we have legal clarity, it's time their customers get fair compensation.”
At the same time, the watchdog has turned its attention to a very different corner of modern finance – the booming world of social media investment advice. Working with regulators in several countries, the FCA launched a coordinated crackdown on so-called ‘finfluencers’, individuals who promote financial products online without authorisation. Arrests, cease-and-desist notices and hundreds of content takedown requests followed, signalling a regulator determined to keep pace with the shifting geography of financial promotion.
His leadership was further endorsed in April 2025, when chancellor Rachel Reeves confirmed that he would remain at the helm of the FCA for a second five-year term, extending his tenure until 2030. Reeves praised his role in reshaping regulation to support investment and economic growth, noting that he had been “crucial in this government’s efforts to reform regulation so it supports growth and boosts investment.”
For Rathi, the challenge is to reconcile two pressures that often pull in opposite directions: the demand for tougher consumer protection and the political imperative to keep the UK competitive as a global financial centre.
That balancing act has defined his tenure since he took charge of the FCA in October 2020. The appointment came at a turbulent moment. Britain had just left the European Union, forcing regulators to rethink thousands of inherited rules. The pandemic had unsettled markets and households alike. Meanwhile, a wave of fintech innovation – from digital banking to cryptocurrencies and AI-driven trading – was rapidly transforming the industry the FCA was designed to supervise.
Rather than simply tightening the rulebook, Rathi has argued for a shift in the philosophy of regulation itself. He has championed what he calls an outcomes-based approach, relying less on ever-expanding rulebooks and more on broad principles that require firms to deliver fair outcomes for consumers.
“We are moving to an outcomes-based approach that will mean less rules in the future,” he has said, pointing to the FCA’s flagship Consumer Duty regime as a cornerstone of that strategy.
The regulator has also attempted to combine oversight with experimentation. Regulatory “sandboxes” allow fintech firms to test new products under supervision, while programmes exploring artificial intelligence in financial services aim to ensure innovation develops alongside safeguards.
These initiatives reflect Rathi’s unusual vantage point within the financial ecosystem. Before arriving at the FCA, he had already spent years shaping policy inside government and running one of the world’s most prominent market institutions.
Born to Indian parents and educated at the University of Oxford, where he studied philosophy, politics and economics, Rathi began his career at HM Treasury. The timing proved consequential. As the global financial crisis erupted, he became deeply involved in the government’s efforts to stabilise Britain’s banking system.
He served as private secretary to the prime minister between 2005 and 2008, before moving into senior Treasury roles focused on financial stability. As head of the financial stability unit and later director of financial services, he oversaw key policy interventions and represented the UK on the EU’s Financial Services Committee.
In 2014 Rathi moved into the private sector, joining the London Stock Exchange Group as director of international development. Within a year he had become chief executive of the exchange’s core London business, responsible for one of the world’s most important capital markets.
The role offered him a rare perspective: a policymaker who had seen markets from both sides of the regulatory divide. When he returned to the public sector to lead the FCA, he brought with him an insider’s understanding of how companies and investors respond to regulation.
Under his leadership the FCA has introduced sweeping reforms to the UK’s listing regime, the most extensive changes in more than three decades. It has expanded enforcement efforts, shortened authorisation times for firms and introduced the Consumer Duty, which requires companies to demonstrate that their products provide fair value and clear communication for customers.
The cumulative effect has been to reposition the regulator not merely as a watchdog but as an institution shaping the future of Britain’s financial markets.
“I am proud of the reforms we have delivered to support growth, bolster operational effectiveness, set higher standards and keep our markets clean and open,” Rathi said after securing his second term as chief executive.
The remark captures the dual nature of his mission. Markets must remain innovative and competitive, but they must also command public trust.
In an era when financial systems are increasingly entwined with technology, geopolitics and national security, that balance has become harder – and more consequential – than ever. For Rathi, the power of regulation lies precisely in managing that tension.
ENDS
