Woolard, who is leaving the regulator shortly, also noted that rules should be more straightforward for smaller firms alongside further embracing of outcome-based regulation.
Speaking at the 10th annual International Financial Services Forum, Woolard acknowledged it could be a difficult few months for the regulator.
He said: “In the autumn, we will see the results of a number of reviews into potential failures of the regulatory system.
“I have no doubt there will be painful lessons and the FCA will need to learn from them.”
Woolard admitted the FCA realised it had to do more in combating scams and consumer detriment with a focus on analysing data and intelligence it receives.
He said: “You cannot hope to effectively regulate 60,000 firms, most of them small, as we do, unless we make progress on this front.
“Last year, we put in place a new data strategy to make sure we brought in the analytical skills we need, to raise the minimum standard of data understanding among all our staff, to ensure we have the kit to take full advantage of the skills we have and the huge amount of data on which we sit.”
Along with embedding this data strategy, the FCA is adding a “more empowered function to manage intelligence coming into the FCA”.
This team will integrate the way the regulator prioritises and manages “key and potential harms across the organisation, bringing together a number of local teams doing this task,” Woolard continued. “We know we have more to do,” he added.
Finely balanced judgements
Woolard also defended those working at the FCA to maintain the regulations and keep firms in line.
“I have 4,000 colleagues willing to make judgements. They are good people. Some routinely put themselves in the way of harm for the public they serve,” he said.
“We deal with individuals who you would not like to meet – some are dishonest, some corrupt, some dangerous. We seek to help millions of ordinary people – and we have during this pandemic.
“But the nature of the work we do means the odds are there will be times where we cannot stop failure or where we call a finely balanced judgement wrongly or miss something,” he added.
Easier for smaller firms
Woolard argued that the last six months had shown his initial suggestion last October of greater reliance on outcomes-based regulation was the right path to follow.
“I argued we needed to think about more outcomes-based regulation – looking at what the regulatory system was trying to achieve and whether those outcomes were being met,” he continued.
“That as regulators, we need to use the full range in our kit, not just have disclosure as a go-to tool. If anything, the last six months have shown we can think creatively about what we do and how we do it.”
He noted that the FCA needed to work closely with other agencies and regulators as product boundaries become blurred and that “the FCA’s own requirements should be more straightforward, especially for smaller firms”.
“And we need to make sure the rulebook isn’t analogue in a digital age. I believe those arguments still hold and Covid-19 has shown they are even more urgent.
“We need to look at whether our handbook of rules is doing what it needs to do, and amend if necessary,” he concluded.