The Future of SMCR: Why Accountability Matters More Than Ever

The UK’s Senior Managers & Certification Regime (SMCR) is entering its next phase of evolution.

Recent announcements from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) mark the first wave of reforms designed to streamline elements of the regime while maintaining its core objective: strengthening individual accountability across financial services.

The StarCompliance (Star) webinar, SMCR and Individual Accountability: What Firms Need to Know in 2026, brought together perspectives from across the industry on one of the most significant regulatory developments facing UK financial services. I was pleased to sit down with Leslie Coombs, Director at Citi, and Rob Fisher, SMCR expert at Aviva, to discuss the latest reforms, what they mean for firms in practice, and where the future of individual accountability is heading.

While some administrative requirements are changing, one message emerged clearly throughout the discussion: SMCR is not becoming less important. It is becoming more focused.

Here are four key takeaways from the webinar:

1. Administrative Burden Is Being Reduced, Not Accountability

Much of the initial reform package focuses on reducing operational complexity.

Changes to directory submissions, regulatory references, certification processes, and governance obligations are intended to simplify administration and reduce unnecessary effort for firms.

However, both Fisher and Coombs cautioned that the projected cost savings may vary depending on the size and complexity of an organisation. Larger firms with mature governance programmes may see less benefit than smaller organisations because many compliance activities are already embedded into broader governance processes.

The panel also highlighted the FCA’s willingness to engage directly with firms throughout the reform process. Rather than prescribing every operational detail, the regulator appears committed to gathering industry feedback before determining the final shape of future reforms.

2. Accountability Remains the Cornerstone

Although administrative processes may become more efficient, the panel agreed that the fundamental principles of SMCR remain unchanged.

Senior managers continue to be accountable for ensuring individuals are competent, fit and proper, and operating to the standards expected by regulators.

Even if aspects of certification evolve over time, firms are unlikely to reduce the rigour of their internal governance. Individual accountability extends well beyond regulatory requirements and remains central to effective risk management and organisational culture.

3. A Shift Towards Culture and Outcomes

One of the strongest themes throughout the discussion was the changing nature of regulatory supervision.

Rather than concentrating primarily on documentation and administrative processes, the FCA appears increasingly focused on how firms embed accountability, conduct, and culture throughout their organisations.

The panel discussed growing regulatory attention around non-financial misconduct, behavioural standards, and the use of Section 166 Skilled Person Reviews as evidence of this broader supervisory approach.

The direction is clear: regulators are becoming less interested in paperwork alone and more interested in whether firms can demonstrate that accountability is genuinely embedded within day-to-day operations.

4. Engagement With Regulators Is Increasing

Both panellists described the FCA as increasingly collaborative during the consultation process.

While many of the final proposals are still expected later this year, firms have been encouraged to engage directly with supervisors and provide practical feedback on how proposed changes may affect operations.

That open dialogue was viewed as one of the more positive developments emerging from the reform process and reflects a regulator seeking practical, workable solutions while maintaining strong governance standards.

Preparing for the Next Phase of SMCR and How Star Can Help

Although the first phase of reforms focuses largely on operational efficiencies, firms should avoid viewing these changes as a relaxation of expectations. Instead, organisations should use this opportunity to review governance frameworks, certification processes, accountability mapping, and culture programmes to ensure they continue to support both regulatory expectations and business objectives.

As the discussion concluded, the future of SMCR is likely to place greater emphasis on outcomes, accountability, and organisational culture than on administrative compliance alone. To help firms navigate this evolving landscape, Star’s SMCR solution for the United Kingdom enables in-scope financial institutions to establish and maintain a robust Senior Managers Regime while adapting to regulatory changes as they occur. Click [HERE] to book a demo.

Watch the Webinar On Demand

Want to hear the full discussion? Watch the on-demand webinar for deeper insights into the latest SMCR reforms, practical implementation considerations, and what firms should expect as the FCA’s proposals continue to evolve. Click [HERE] to view.