Performance account

 

The Outcomes Performance Report (OPR) was developed in order to help us measure and evaluate our performance against high level regulatory outcomes, using a wide range of metrics. This will also inform our implementation of principles-based regulation.

There are nine outcomes, three under each strategic aim, which are set out in the panel below. These explain what success in delivering the three aims will mean in practice and will, over time, enable us to judge our achievement of that success. These outcomes will increasingly drive our planning, decision-making and operational activities.

 
Strategic Aim Outcome number Definition
Help retail consumers achieve a fair deal
1
 Consumers receive and use clear, simple and relevant information from the industry and from us
2
 Consumers are capable and confident in exercising responsibility when dealing with the financial services industry
3
 Financial services firms treat their customers fairly and so help them to meet their needs
Promote efficient,
orderly and
fair markets
4
 Firms are financially sound and well managed
5
 Firms and other stakeholders understand their respective responsibilities and mitigate risks relating to financial crime and arising from market conduct
6
 Financial markets are efficient, resilient and internationally attractive
Improve our business capability and effectiveness
7
 The FSA is professional, fair, efficient and easy to do business with
8
 The FSA is effective in identifying and managing risks to our statutory objectives
9
 The costs and benefits of regulation are proportionate

 

These outcomes are further broken down into a number of sub-outcomes. We will measure our baseline for and progress towards each sub-outcome using specific metrics (see links to source data below). In its first iteration, the OPR has a total of nearly 100 metrics underpinning our analysis and illuminating our performance. There are different timescales associated with different metrics. The metrics are likely to be reduced in number and refined as we gain experience of using them.

Our use of the OPR is a key tool in sustaining the momentum behind our internal change to be more outcome-focused and principles-based. We will integrate the OPR into our routine management information so that we can monitor regulatory outcomes, risks, effectiveness, efficiency and economy. Our internal approach to measuring how successful we are in meeting our objectives therefore closely mirrors the outcome focus that is driving our external regulatory strategy.

We will publish further detail on the OPR in the coming months.

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Outcomes

Outcome 1 - Consumers receive and use clear, simple and relevant information from the industry and from us

Outcome 1 will be assessed using the Consumer Purchasing Outcome Survey. We will report the first findings of this in Autumn 2007.

Outcome 2 - Consumers are capable and confident in exercising responsibility when dealing with the financial services industry

Outcome 2 is a long-term outcome, and we will run the Financial Capability Survey every four to five years.

Outcome 3 - Financial services firms treat their customers fairly and so help them to meet their needs

Outcome 3 addresses whether firms treat their customers fairly, and whether consumers end up with suitable financial products and services. We track performance through the ARROW supervision framework, complaints data, thematic work, performance against TCF embedding, and a wide range of other inputs as described in the annual TCF performance report (first edition due in November 2007).

Outcome 4 - Firms are financially sound and well managed

Outcome 4 assesses whether 'Firms are financially sound and well managed'. The ARROW risk assessment framework informs assessments of relationship managed firms. We also apply the internal Alert and Risk Indicator (ARI) framework to understand the financial soundness and management of smaller firms, informed by regulatory returns.

Outcome 5 - Firms and other stakeholders understand their respective responsibilities and mitigate risks relating to financial crime and arising from market conduct

Outcome 5 is assessed using the Financial Crime Survey of firms, the Consumer Awareness Survey, and market cleanliness measures. We base market cleanliness on the extent to which ‘informed price movements’ are observed ahead of ‘significant’ (i.e. price-sensitive) regulatory announcements issuers make to the market.

Outcome 6 - Financial markets are efficient, resilient and internationally attractive

Outcome 6 assesses whether 'financial markets are efficient, resilient and internationally attractive'. Efficiency is measured through a series of wholesale and retail measures, and the efficiency of the UK Listing Authority. Resilience is measured through the Resilience Benchmarking Project. International attractiveness is gauged through a number of surveys assessing London's relative position as an international financial centre, and through its global share of financial activities such as Initial Public Offerings (IPOs).

Outcome 7 - The FSA is professional, fair, efficient and easy to do business with

Outcome 7 mainly takes advantage of the two-yearly Practitioner Panel survey, but also captures performance against external Service Standards, and our own customer satisfaction surveys of regulatory processes. With respect to fairness, we now also track feedback in the Enforcement Performance Account.

Outcome 8 - The FSA is effective in identifying and managing risks to our statutory objectives

The prime source of performance information for Outcome 8 is our survey of what relationship-managed firms' think about our supervision.

Outcome 9 - The costs and benefits of regulation are proportionate

We have carried out a Cost of Regulation study with Deloitte. This, and the Administrative Burdens report commissioned with Realassurance, has given us details on where we should focus our efforts to reduce costs. We are looking at more studies to improve our ability to track cost, benefit and proportionality.

Effectiveness Reviews

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