Children's Data Protection, Changes to FSCS and Addressing Market Volatility

Vicky Pearce

Hello and welcome back to the B-Compliant podcast. So last week the FCA was quiet, however, the Information Commissioner's Office, or ICO, has released a pretty significant review into how children's data is managed by financial services providers. It’s part of their ongoing effort under the UK GDPR and the ICO25 strategy to protect vulnerable groups, like children.

Rachel MacRae

You know, this topic doesn’t get the attention it deserves! I mean, how often do firms even look at these things beyond ticking the compliance boxes?

Vicky Pearce

Exactly. And the review found that while most organisations do have policies in place, only a few are really monitoring compliance properly. Without that monitoring—or staff training on children’s data, specifically—there’s a real risk of those policies just gathering dust.

Rachel MacRae

Wait, they’re not training staff on this at all? That seems like such a basic step.

Vicky Pearce

Well, it’s not entirely absent, but it’s minimal. And then there’s the issue of privacy notices. A lot weren't written in a way that kids could even understand. Some firms are relying too much on parents, which, you know...

Rachel MacRae

...That’s risky, right? I mean, kids could end up agreeing to things they don’t really get. And shouldn’t they have their own say as they grow older?

Vicky Pearce

Spot on. As kids mature, consent needs to be reviewed and updated, but many firms seem to overlook that entirely. And how about this? Children’s data rights were rarely exercised. Firms just defer to the parents’ decisions without assessing if the child is capable of deciding themselves.

Rachel MacRae

Okay, that’s... kinda shocking. Especially when you think about how many younger people are using financial services now. What did the ICO say about fixing these issues?

Vicky Pearce

They’ve provided practical guidance, but it’s really all about getting firms to adapt their policies. For example, making privacy notices more age-appropriate, improving transparency, and ensuring clearer communication around marketing. That way, the child knows exactly what they’re signing up for and how their data’s being used.

Rachel MacRae

Which is so important! Otherwise, how do they even begin to exercise their rights?

Vicky Pearce

Exactly. And another positive—age verification processes seem to be pretty robust overall. So at least firms are doing well there.

Rachel MacRae

But it doesn’t mean they’re off the hook for, like, proper transparency or updating consent. There’s a lot more work to be done.

Vicky Pearce

Absolutely. Especially when firms risk non-compliance because of unclear practices with children. That’s where strategic improvements can make a real difference.

Vicky Pearce

Speaking of ensuring better protection, the PRA has announced a proposal to increase the FSCS deposit protection limit—from eighty-five thousand pounds up to one hundred and ten thousand. That’s actually quite a significant jump when you think about it.

Rachel MacRae

Really? That’s massive! What’s driving such a big change, though?

Vicky Pearce

Well, inflation is the big one here. The limit hasn’t been updated since 2017, so this adjustment is really about maintaining public confidence. You know, making sure depositors feel assured that their funds are protected—even as the value of money shifts. It’s all tied to keeping the system stable and reliable.

Rachel MacRae

Okay, that makes sense. But it’s not just a quick “raise the number and move on,” right? There’s gonna be loads behind the scenes for firms to manage, I bet.

Vicky Pearce

Exactly. If this proposal goes ahead, firms will need to start looking at their policies and procedures well before the implementation date in December twenty twenty-five. It’s not just a case of updating a figure here and there in your documents.

Rachel MacRae

Yeah, because customers’ll need to understand it too, right? I’m guessing communications will play a huge role here.

Vicky Pearce

Absolutely. Firms will need to review how they communicate these changes to customers. It’s crucial to ensure clarity, so people know what’s covered and what’s not. And it’s also a great opportunity to reinforce trust by explaining how the FSCS works in general.

Rachel MacRae

Oh yeah, 'cause not everyone gets how it works. Like, I remember explaining to someone that it’s per institution, not each individual account. They had no idea!

Vicky Pearce

Yes! That's a common misunderstanding, and it highlights why clear messaging is vital. Plus, there’s the operational side—firms will need to update internal systems to reflect the new limit, train staff, and potentially review risk assessments as well.

Rachel MacRae

So, kinda like a massive compliance review across the board. Fun times ahead.

Vicky Pearce

You said it. But for firms that start planning now, it’s manageable. The key is not leaving everything until the last minute, especially for integrated systems that might take time to update.

Rachel MacRae

Right. And it’s not just about meeting the deadline—it’s showing customers that you’re, like, proactive and on top of these changes. It’s all about confidence, isn’t it?

Vicky Pearce

Exactly. Consumer confidence, operational readiness, and staying compliant. It’s all interconnected.

Vicky Pearce

Speaking of keeping confidence high and staying prepared, it’s not just about deposit protection. The Financial Ombudsman Service is projecting they’ll handle up to two hundred and seventy thousand complaints by twenty twenty six—a massive twenty percent jump from the previous year.

Rachel MacRae

Wow, that’s a pretty steep climb! What’s driving those numbers up?

Vicky Pearce

Well, it's partly due to increased consumer awareness and the higher compensation award limit—now up to four hundred and forty-five thousand pounds. But the FOS is also improving access by modernising their processes and using digital tools, which might encourage more complaints to be filed as systems get easier to navigate.

Rachel MacRae

So, like, more efficiency but... also more pressure on firms to get things right ASAP. Makes sense.

Vicky Pearce

Exactly. And complaint management is absolutely crucial here. Firms need to not only respond efficiently but also identify patterns and root causes early on. Being proactive can save so much time—and reduce the reputation risks associated with unresolved complaints.

Rachel MacRae

Yeah, 'cause no one wants to be flagged as that company—the one customers are constantly complaining about.

Vicky Pearce

That’s right. Which is why implementing robust case management systems and training staff to handle disputes effectively are non-negotiables in today’s climate.

Rachel MacRae

It’s, like, handle the small fires before they turn into a full-blown blaze.

Vicky Pearce

Exactly. And speaking of fires, let’s shift to market volatility—something firms might be grappling with now thanks to those tariffs recently announced by President Trump.

Rachel MacRae

Oh, tariffs. They never fail to stir the pot, do they?

Vicky Pearce

No, they don’t. And these particular ones could lead to quite a bit of global market uncertainty, especially in trade-heavy sectors. Firms really need to evaluate how these shifts might impact client portfolios and overall investment strategies.

Rachel MacRae

So, you’re saying it’s time to revisit asset allocations and, like, dust off those old risk assessments?

Vicky Pearce

Exactly. And it’s also a great opportunity to lean on data-driven decision-making. By monitoring trends and adapting proactively, firms can protect their clients from unnecessary exposure to volatile sectors.

Rachel MacRae

And that’d definitely score some brownie points with clients, right?

Vicky Pearce

Absolutely. It builds trust and sends a clear message: that the firm is on top of things and prioritises client interests above all else.

Rachel MacRae

Which, let’s face it, is the whole goal when you’re dealing with compliance and markets.

Vicky Pearce

Exactly. It's about maintaining stability and confidence while navigating unpredictability. And on that note, Rachel, I think we’ve covered a lot of ground today—from the ICO’s guidance on children’s data, to the PRA’s proposed FSCS changes, and now this.

Rachel MacRae

Yeah, it’s been a packed session! But honestly, these are the kinda topics that, once you get into them, aren’t quite as daunting as they might seem at first. Thanks for breaking it all down, Vicky.

Vicky Pearce

No problem at all! And to our listeners, thanks for joining us today. Stay safe, stay compliant, and we’ll catch you next time!