The U.K. financial regulatorโ€™s move towards โ€œimpactful deterrenceโ€ could see smaller and mid-size firms come increasingly under the spotlight as the watchdog aims to tackle market-wide concerns instead of primarily focusing on large players capable of doing the most harm.

Neil Hodge is a freelance business journalist and photographer based in Nottingham, United Kingdom. He writes on insurance and risk management, corporate governance, internal audit, compliance, and legal...