What is one expected outcome of encouraging innovation in financial services according to FCA?

The expected outcome of encouraging innovation in financial services, according to the FCA, is indeed an increase in competition and consumer choice. Innovation typically introduces new products, services, and technologies, which can disrupt traditional models and challenge existing market players. As new entrants bring fresh ideas and offerings to the market, consumers benefit from a wider selection of financial products and services tailored to their needs.

This increase in competition helps to drive down prices, improve service quality, and fosters a more dynamic market environment. By prioritizing innovation, the FCA aims to create a financial services ecosystem that is responsive to consumer demands and promotes a vibrant marketplace where customers have access to diverse options, ultimately benefiting them and enhancing their financial well-being.

In contrast, the other options do not align with the FCA’s objectives. The establishment of monopolies contradicts the principles of competition and consumer choice, while higher regulatory costs and a reduction in service offerings would not serve to enhance the market but instead could limit the choices available to consumers.