For CCTA members, this matters because the report touches directly on issues shaping the future of consumer credit, including Buy Now Pay Later (BNPL), illegal lending, financial promotions, digital distribution models and consumer misunderstanding around regulatory protections.

The “regulatory perimeter” defines which activities fall under FCA regulation and which do not.

That distinction is becoming increasingly important as technology changes the way consumers access credit and financial services. Consumers often assume that all financial activity carries the same protections, even where activities fall outside FCA regulation or Financial Ombudsman Service jurisdiction.

The FCA highlights growing concern around digital business models, online financial promotions, AI-driven tools and unauthorised activity operating close to the edge of regulation. This reflects a wider challenge for regulators globally: innovation is moving faster than traditional regulatory boundaries.

The report reflects the continuing expansion of regulation into areas that historically sat outside the perimeter.

BNPL or Deferred Payment Credit is the clearest example. Products that initially operated through exemptions are now moving toward full regulation. This signals a broader regulatory direction of travel: perimeter exemptions are likely to face increasing scrutiny where products become mainstream or where the FCA identifies risks around consumer understanding or outcomes.

For firms across consumer credit, this means the regulatory landscape is likely to remain dynamic. Digital distribution models, embedded finance and AI-supported customer journeys are all areas where future regulatory expectations may evolve quickly.

The FCA is also increasingly focused on consumer understanding. In practice, this means firms will need to think carefully about how customers perceive products, communications and digital interactions, not simply whether formal disclosures exist.

One notable aspect of the report is the FCA’s focus on artificial intelligence and large language models.

The regulator notes that consumers are increasingly engaging with AI-driven financial content and guidance, despite many of these services sitting outside regulated advice frameworks.

This issue is highly relevant to consumer credit. Across the sector, firms are already exploring AI-supported affordability assessments, customer support tools, collections communications and vulnerability identification.

The challenge for firms and regulators alike will be maintaining clarity around accountability, customer understanding and oversight as these technologies develop further.

The perimeter report is not simply a technical regulatory document. It provides insight into the FCA’s wider direction of travel and highlights where future policy attention is likely to focus.

For CCTA members, several themes stand out.

First, the boundary of regulation is becoming increasingly fluid. Activities previously seen as outside regulation may move inside the perimeter over time.

Also, consumer misunderstanding is becoming a central regulatory concern. Firms will increasingly need to demonstrate not only compliance, but also that consumers properly understand products, risks and protections.

The FCA’s perimeter report reflects a regulator attempting to balance innovation, growth, competition and consumer protection in an increasingly complex market.

For consumer credit firms, the key challenge will be ensuring that efforts to reduce harm do not unintentionally reduce access to safe, regulated borrowing.

The debate about the perimeter is therefore not simply about what is regulated. Increasingly, it is also about what happens when regulated options disappear.