If regulators are going to talk tough, they need to have the track record to back it up. Most don’t.

On July 15, the U.K. Financial Conduct Authority (FCA) put out a statement committing to be a “more innovative, assertive, and adaptive regulator.” Its recently installed CEO Nikhil Rathi said, “The FCA must continue to become a forward-looking, proactive regulator. One that is tough, assertive, confident, decisive, agile. One that acts, acts fast—and where we can’t act, engages enthusiastically with those who can.”

It all sounds laudable. But the regulator’s annual enforcement report, released the same day, tells a very different story.

First, the good news: In 2020/21, the FCA issued 134 final notices (119 against firms, 15 against individuals) and secured 147 outcomes via enforcement (144 regulatory/civil, three criminal).

However, it imposed just 10 financial penalties—eight against firms, two against individuals. This is down from an already low base of 15 a year prior. The total amount of fines imposed was also down: £189.8 million (U.S. $260 million) compared to £224.4 million (U.S. $307 million) the previous year.

Compare the FCA’s figures to those of the U.S. Securities and Exchange Commission (SEC), which brought 715 enforcement actions totaling a record $4.68 billion in disgorgement and penalties during fiscal year 2020.

The FCA’s enforcement record is patchy in other areas, too: For example, the length of time needed to investigate, resolve, and prosecute cases is still very high—and expensive.

An average regulatory or civil case—even for those where no further action is taken—takes two years to complete. A case that goes to the FCA’s regulatory decisions committee takes four years on average, while a tribunal case can take 10 years. Even a case that is resolved through a settlement takes nearly three years on average to complete.

It is difficult to discern an average for criminal cases since there are so few; in 2018-19, it was six years. In the past year, that timeframe has come down to 29 months.

Meanwhile, the average cost of a case resolved through settlement has nearly doubled in just two years, from £195,200 in 2018-19 to £365,700 now. The same is true of cases referred to either the FCA’s regulatory decisions committee or a tribunal: up from £253,500 to £597,600 and £447,300 to £826,700, respectively.

Such a strain on time and resources does not indicate caseloads are going to be turned around more quickly. Nor does it suggest the regulator can be as proactive as it might like to be with a budget that is unlikely to rise in line with its wishes.

For some, the FCA’s willingness to be more proactive will be a welcome move and will act as a signal to many firms that regulatory compliance needs to be a priority.

Cynics, however, might feel they have heard such posturing before.

Indeed, the FCA has had an embarrassing record of late of being largely powerless to act against abusive practices simply because it does not have the authority to do so. Most commercial lending falls outside the regulator’s remit, while companies that are seemingly obviously offering financial services are not always covered either.

Many of the types of business conducted by the disgraced Greensill Capital, for instance, are likely to evade enforcement action since they are not deemed regulatory activities. The origination of a supply chain finance instrument is not a regulated activity, while employer salary advance schemes are not considered to be a credit-related regulated activity.

If the FCA wants to ensure its role as a “proactive” regulator is to be taken seriously, it should push for such gaps—and others—to come under its watch.