FCA’s anticipated priorities for building societies

For building societies, 2026 presents a regulatory landscape increasingly shaped by the FCA’s evolving priorities.

As member-owned institutions operating primarily in the mortgage and savings markets, building societies are subject to regulatory expectations that reflect their distinct business models and risk profiles.

Understanding the FCA's areas of focus for the year ahead will be essential for boards and senior management teams to ensure compliance, protect members, and maintain competitive advantage. This article examines the key regulatory priorities expected to influence the operating environment for building societies throughout 2026. 

Strengthening consumer protection and the Consumer Duty 

The FCA's flagship Consumer Duty initiative has moved from implementation into a phase of active supervision and enforcement. Building societies are now expected not only to comply with the Duty's higher standards, but to demonstrate that they are delivering good customer outcomes in practice. The FCA is likely to scrutinise whether products offer fair value, whether terms are transparent, and whether customers – particularly those in vulnerable circumstances – receive appropriate support. 

For building societies, this will require rigorous review of mortgage and savings products to ensure pricing and fees represent fair value. The FCA has made clear that firms should use robust analysis to assess value and take action where products do not meet the required standard. Following its cash savings work in 2023, the regulator continues to expect deposit-taking firms to assess and, where necessary, improve the value provided by their savings accounts.

Protecting financially vulnerable customers remains a core FCA priority. Building societies should pay close attention to borrowers in difficulty and to customers with characteristics of vulnerability. New FCA rules strengthening protections for borrowers facing financial difficulty took effect in late 2024, and supervisory focus is expected to centre on effective implementation during 2026. Societies should ensure they have appropriate forbearance options, clear communications, and proactive support for members struggling with repayments.

Interest-only mortgages reaching maturity represent a further area of concern. The FCA has highlighted the need for firms to engage borrowers well in advance of maturity and to offer appropriate options, such as term extensions or structured repayment plans. 

Fair access and financial crime prevention 

The FCA continues to emphasise the importance of fair and inclusive access to essential financial services. As firms modernise their distribution channels and move services online, the regulator has warned that customers must not be left behind or unfairly prevented from accessing core products and support. This priority is particularly relevant for building societies, which often serve local communities and members who may be older or less digitally confident. Societies are expected to ensure that their policies and processes do not result in unreasonable barriers to accessing savings, mortgages, or related services. 

Fighting financial crime remains a top FCA priority. Building societies can expect ongoing scrutiny of their anti-money laundering frameworks, customer due diligence arrangements, and fraud prevention controls. FCA is increasingly using data analytics to identify firms that appear to be outliers in their financial crime controls and to target supervisory engagement or intervention accordingly. 

The authorised push payment (APP) fraud reimbursement regime will continue to have significant implications for building societies in 2026. Societies will need effective processes, governance and financial resources in place to reimburse customers who fall victim to scams, except in defined circumstances. This reinforces the regulatory and commercial imperative to invest in robust fraud detection and prevention measures.

Closing the advice gap and supporting mutual growth 

From 2026, the FCA plans to introduce a new 'Targeted Support' regime aimed at helping consumers make more informed decisions about their savings, investments, and pensions. This initiative is intended to allow regulated firms to provide more tailored guidance to groups of consumers without crossing the boundary into regulated financial advice. For building societies, this could present an opportunity to better support members with significant cash savings or limited investment knowledge. Under the regime, societies may be able to help members understand appropriate savings and investment pathways or the types of products that may be suitable for their circumstances. 

Alongside this, the FCA and the Prudential Regulation Authority have set out plans to support the growth and resilience of building societies and other mutual firms. A new FCA-led 'Scale-Up Unit' is intended to act as a central hub, providing regulatory expertise, guidance and support to mutuals seeking to expand. The initiative is also expected to promote collaboration, share best practice, collaborate, and help firms build operational resilience. In addition, the FCA has streamlined processes for new mutual entrants, including shorter application timelines and free pre-application support. 

Operational resilience and governance 

UK financial firms were required to implement the FCA’s operational resilience framework by March 2025. At the start of 2026, the focus is expected to shift towards supervisory scrutiny, with the FCA expecting firms to actively test their resilience and demonstrate credible recovery capabilities. Building societies should be prepared for regulatory reviews of their contingency planning, backup arrangements, and incident response strategies.

The FCA has emphasised that firms must be able to continue delivering important business services within set impact tolerances under severe but plausible scenarios, including IT failures, cyber attacks, or liquidity stresses that could cause major consumer harm. Supervisors are likely to request evidence of scenario testing, remediation activity and lessons learned from operational incidents.

Alongside operational resilience, the FCA continues to stress the importance of effective leadership, healthy cultures, and strong internal controls. For building societies, which pride themselves on member-focused values, this serves as a reminder to reinforce a customer-centric culture from board level down. Individual accountability also remains a key FCA focus, with the regulator maintaining a robust approach to the Senior Managers and Certification Regime and personal accountability for senior leaders.

Driving sustainable finance standards 

The FCA continues to push for higher standards in the design and marketing of environmentally focused financial products, with an overarching aim of tackling greenwashing. Many building societies now offer green mortgages or savings products that are promoted as supporting environmental objectives. Under the FCA's anti-greenwashing rules, which form part of its wider sustainability framework, any sustainability-related claims must be clear, fair, and not misleading.

Building societies should review their product literature, websites, and promotional materials to ensure that claims relating to environmental impact, carbon reduction or community benefit are credible, specific and capable of substantiation. Internally, firms should also have appropriate governance arrangements in place to oversee such claims – for example, committees responsible for approving environmentally focused products and monitoring whether those products continue to meet their stated objectives over time.

Conclusion

The FCA's priorities for 2026 present both challenges and opportunities for UK building societies. The regulatory environment demands higher standards in consumer protection, operational resilience, and environmental claims, while also offering tailored support for mutual growth and innovation.

Building societies that prepare early for these focus areas – from Consumer Duty reviews to operational resilience testing – will be well placed to navigate 2026's challenges and continue to fulfil their mission for members within a fair, secure, and innovative financial services sector.