The Financial Services Compensation Scheme (FSCS) has revealed its strategy to slash compensation costs over the next five years.

The body’s new document ‘FSCS into the 2020s: Protecting the Future’ identifies the challenges of the coming decade and FSCS’s priorities in meeting those challenges.

It set out four strategic priorities for the next few years:

• Prepare – FSCS must be able to protect consumers in a crisis or in the event of major failures to maintain public confidence and financial stability.

• Protect – FSCS is known and trusted for protection that puts people back on track through outstanding customer experience.

• Promote – The full range of FSCS protection is known about and trusted.

• Prevent – FSCS collaborates with our regulatory and industry stakeholders to help prevent future failures and to reduce compensation costs.

One of the priorities was reducing compensation by sharing experience of what causes and firms to collapse with regulators and the Government.

Mark Neale, chief executive of FSCS, says: “Our strategy for the 2020s spells out clearly the challenges we will face, our strategic priorities that will meet those challenges, and what we aim to achieve as we enter the 2020s.

“With rising customer expectations and increasing complexity in many aspects of personal finance, FSCS needs to adapt if we are to continue to provide a trusted compensation service which raises public confidence in the financial services industry.”

He added: “We are confident this strategy will enable us to deliver our mission.”