The 2024 Firm Feedback Exercise
The annual Firm Feedback Exercise gives a sample of PRA-authorised firms the opportunity to comment on their experience of being supervised by the PRA.
As the regulatory landscape evolves, the PRA seeks to understand how the firms it regulates view the effectiveness and quality of our supervisory framework and approach. One way this is done is through the annual Firm Feedback Exercise. Firms are given the opportunity to comment on their experience of being supervised by the PRA by completing a survey and by participating in face-to-face meetings with a team independent of supervision.
The 2024 survey was sent to 436 PRA-regulated firms or Groups of firms, a significant increase from the 185 firms sampled in 2023. 303 firms responded. The PRA asked sampled firms to provide feedback on what works well and what could be done differently by indicating the extent to which they agreed with statements on a range of topics, including:
- the PRA’s understanding of firms;
- the firms’ understanding of our regulatory objectives and expectations;
- the PRA’s level of challenge to firms;
- the effectiveness of the PRA’s relationship with firms;
- coordination with other regulators and data requests;
- the clarity and accessibility of prudential policy, rules, and requirements; and
- the PRA’s secondary competitiveness and growth objective (which was new for the 2024 survey).
Firms were also asked to offer additional comments and suggest areas for improvement.
The PRA followed up on the survey by holding meetings with a cross-section of firms to help it understand better the reasons for their responses and to explore in more detail how they view the PRA and its work.
How are the survey results used?
The PRA analysed firms’ responses to identify areas where it could improve how it supervises firms, and good practices to maintain and apply more broadly where appropriate. This analysis is reported to senior management in the PRA and the Prudential Regulation Committee. The analysis is also shared with the PRA’s Practitioner Panels. The PRA also followed up on the points raised by firms, including with the relevant supervisory directorate, being mindful of any confidentiality and sensitivity issues.
Main messages from the 2024 Exercise
Average scores were higher than in 2023 for most of the topics covered, indicating that firms continue to hold positive views about the PRA.
Firms provided the most positive scores for the effectiveness of their relationship with the PRA. In particular, firms provided positive comments on the approachability, responsiveness, and professionalism of supervisory teams and noting improvements in communication and engagement over the past year.
Scores relating to the PRA’s regulatory framework, rules and policy were lower than the other themes surveyed, although this section had a comparatively high number of “neither agree nor disagree” responses.
A comparison of the scores provided by larger and smaller firms in 2024 suggests there are some small differences in the way that the two groups view the PRA. Overall, larger firms provided higher scores than smaller firms in relation to Supervision teams’ understanding of their business and articulation of the risks to PRA objectives, whereas smaller firms provided higher scores relating to the communication they receive from Supervision teams.
From the comments provided by firms both within the survey and at follow up meetings, some emerging themes have been identified, including:
- Some larger firms reported that they found engagements with PRA specialists can be complex and feel like they take a long time, for example in relation to model approval processes.
- Firms expressed that they would like to have a more coordinated approach between the PRA and FCA, and the PRA and international regulators, eg when developing policy initiatives.
- Firms expressed a desire for the PRA to be more transparent about some aspects of their work, for example in relation to:
- supervisory work plans (to allow firms to prepare for future work);
- the PRA’s engagement with other regulators; and
- providing rationales for data requests from firms.
- Some firms commented on the frequency of changes in the composition of supervision teams and the impact this could have on supervisory relationships. However, there was also some positive commentary about the quality of handovers where supervision staff had changed.
- Smaller firms in particular noted the importance of proportionate regulation and commented that they would like supervisory activity to be more targeted. Smaller firms also indicated that they would like more direct interaction with specialists.
Our response
The PRA’s approach to policy document, published on 20 February 2025 provides detail on how the PRA is already responding to a number of these issues, including in relation to coordination with the FCA and international regulators and handling of data requests.
Drawing on work already carried out between 2021 and 2024 to streamline data collection for insurers, the Future Banking Data (FBD) project aims to deliver tangible cost reduction in regulatory reporting for banks, in line with the PRA’s secondary and competitiveness and growth objective and to improve the quality, relevance, and timeliness of the data the PRA collects.
The PRA is continuing to take forward the Strong and Simple initiative to improve the proportionality of prudential regulation for banks, a policy statement on a simplified capital regime is due to be published in Q4 2025. In May 2025, the PRA also issued a consultation paper, CP11/25 – Discontinuing SS20/15: Supervising building societies’ treasury and lending activities seeking feedback on proposals to support the growth and competition of building societies in the UK market by discontinuing SS20/15 – Supervising building societies’ treasury and lending activities. The raising of the Solvency II thresholds that came into effect in December 2024 has simplified regulatory requirements on capital, governance, and reporting for a larger population of smaller insurance firms.
The PRA plans to review its internal model approvals process for banks with the aim of providing firms with further clarity on expectations and timelines. This will further support the ongoing engagement with firms, including participation in industry roundtables that clarify the PRA’s expectations in relation to Internal Ratings-Based (IRB) model requirements.
All supervisory staff receive regular ongoing training and development to help deliver the PRA’s approach to supervision. Supervisory areas have been reminded of the importance of embedding best practice in their communications with firms including around supervisory work plans, rationales for data requests, and, where appropriate, the PRA’s engagement with other regulators.
When should firms expect to receive the 2025 survey?
A survey will be sent to firms in August 2025. The questions for 2025 will remain similar to those included in the 2024 survey, supplemented by a small number of topical questions which change each year.