The Big Interview: Maggie Craig, Scottish chief of the FCA

Maggie Craig at the offices of the Financial Conduct Authority at Quayside House in Fountainbridge, Edinburgh. Picture: Neil Hanna
Maggie Craig at the offices of the Financial Conduct Authority at Quayside House in Fountainbridge, Edinburgh. Picture: Neil Hanna
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Maggie Craig will have an overflowing in-tray when she gets her feet under the desk as head of department, Scotland, at The Financial Conduct Authority (FCA).

In September she will start in the newly announced position, created as the City watchdog looks to strengthen its roots north of the Border, and she will focus on Scottish elements of FCA policies.

But she jokes that the “icing on the cake” will be not having to get up at 5.10am on Monday mornings to travel from Edinburgh to London, having commuted for the past ten years.

Craig and FCA chief executive Andrew Bailey discuss her appointment at the regulator’s office in Edinburgh’s Fountainbridge, where it has about 90 staff.

She is already “properly embedded” in the organisation, having joined in 2014 and become head of insurance and pensions policy. Previously she was with the Association of British Insurers (ABI) as director of Scottish affairs, acting director-general and, latterly, director of financial conduct regulation.

Her move into regulation coincided with the formation of the FCA in April 2013, when it took charge of conduct and relevant prudential regulation from the Financial Services Authority.

“I just got more and more fascinated by regulation. I have a passion for the oddest things,” she laughs.

It was then a “natural” move to the FCA, which regulates the conduct of 56,000 financial services firms and financial markets in the UK, and serves as the prudential regulator for over 18,000 of them.

“It’s scary the breadth of the remit we have, because we do so much, but that’s what’s attractive about it – I like variety.”

Craig also says it is a longstanding joke with her team that her extensive experience in Scottish financial services means “if someone gets in touch with us and I don’t know them, they wonder who they are”.

She likes analysing problems and finding solutions, and stresses that the finance sector is crucial to modern society. “I can get really ridiculously passionate about it. You can’t operate without a properly functioning financial services industry, and it brings huge benefits to the economy – both Scottish and UK.”

The sector in fact contributes about £8 billion to Scotland, accounting for about a quarter of all UK employment in life assurance and 13 per cent in banking, as well as nearly £66bn in tax to the UK Exchequer.

Bailey, who took on the chief executive role in July last year, and was formerly deputy governor for prudential regulation and chief executive of the Prudential Regulation Authority, emphasises that the Edinburgh office is important to the FCA, whose forerunner organisations have had a presence in the city since 1988, “which goes back quite a few regimes in financial services”.

He says Craig’s appointment came about as the organisation re-evaluated its presence north of the border, and he was keen to maximise this position and pursue its “clear strategy” of engaging in Scotland and with stakeholders.

“We’ve had a bit of gap here, frankly, about how we engage more consistently and extensively with all stakeholders in Scotland – industry, user groups, representative groups and so on, so that’s what we’re starting to really work on.”

Will her appointment drive growth of the team in Scotland? “We’re looking at that,” he says, also noting that the FCA’s headquarters moving from Canary Wharf to Stratford next year will boost its technology, helping communication with its Edinburgh site.

Bailey, also a member of the Prudential Regulation Committee and the Financial Policy Committee, says Scotland has its own unique financial services landscape.

“We really see this as an opportunity, and I’m very pleased and keen that we do see it as an opportunity, to develop distinctively Scottish issues and make sure our public interest role is very much attuned to those issues.”

As for Craig’s plan of action, one key area of focus is the burgeoning fintech sector.

Bailey also highlights the FCA’s Project Innovate, which launched in 2014 and aims to help innovators navigate the regulatory system and improve competition.

Craig started out in a conventional route to financial services by studying maths, but “hated” it and took some time out to work for a pensions firm.

She subsequently returned to her studies, at the University of Glasgow, in English language and literature. “Then I needed a job and they needed a person and I kind of fell into it.”

Roles followed at Aegon and Standard Life, where she was latterly head of public affairs, and then, at the ABI, she lobbied on behalf of the industry, paving the way for her move to the FCA.

She says financial services as a career appealed to her because of her love of communication, and her intention now is to start conversations to boost the FCA’s on-the-ground knowledge.

“I can’t pretend to be an expert on everything the FCA does, but I think it is about having someone who is in Scotland.

“I want to listen to people like Scottish Financial Enterprise, I want to listen to the industry, I want to get out and meet stakeholders and take a sensible view of it.”

One key area is the many challenger banks operating from north of the border such as Sainsbury’s Bank, Tesco Bank and Virgin Money. And Bailey flags up Scotland’s prominent role in the global asset management industry, with the £11bn merger between Craig’s former employer, Standard Life, and Aberdeen Asset Management. “It’s probably not surprising that we’re seeing some of this corporate activity going on as firms reshape themselves… I think that will continue to evolve,” says Bailey.

Craig aims to build on the FCA’s presence: “We’re about public service and it’s about making sure that within Scotland we have a proper Scottish flavour to our public service ethos, but equally that has to be part of the mission that the FCA has as a whole.”

Craig admits that women in top financial positions remain all too rare, but she is quick to praise the FCA for having a greater proportion of women in senior positions than any of her previous employers.

The watchdog has set a target for 45 per cent of its senior leadership team to “identify as female” by 2020, and half by 2025, with the level currently sitting at about 40 per cent.

Bailey also touched on the issue of diversity, both for the firms the FCA covers and itself.

“We will be a better organisation to work in if we are diverse – I’m absolutely convinced about that. I’ve got no desire to work in an organisation entirely composed of people like me,” he says laughing.

“We’re a public-interest organisation, so it is important that we bear a resemblance to the population around us because we better understand the issues that people face and be perceived to be a more understanding organisation. It’s something that you have to work at.”

The FCA, which in July last year came under fire for “defensiveness in the face of criticism”, has in the past few days published plans to extend the Senior Managers Regime to almost all regulated firms and questioned the future of scandal-hit Libor.

Earlier this month it published interim findings of what it said is the first major study of how the retirement income market is changing since the pension freedoms, shining a spotlight on consumers increasingly accessing drawdown without taking advice.

Indeed, pension saving is one area where both Bailey and Craig see a unique pattern in Scotland, and Craig wants to find out what people’s priorities are and “pick up particular Scottish nuances” in a geography with its own legal framework, customer base and approach.

Bailey says: “The next stage for us is to engage with a lot of people in Scotland to not only form our own views but get feedback from people as to what they see as the important things we should be focused on, so I think it’s a great opportunity now to develop that.”