The cost of complexity only becomes visible when it's too late.
In March 2026, the FCA confirmed its industry-wide motor finance redress scheme. 12.1 million agreements in scope. £7.5 billion in expected payouts. Deadlines beginning in June 2026.
For those firms directly in scope, the work of delivery is already underway. Programmes are in flight. That part of the story is well understood.
What interests me more is the question this announcement raises for the rest of the sector.
Motor finance is not a unique event. It is the latest in a recurring pattern where a regulatory moment exposes operational complexity that has been quietly accumulating for years and makes it suddenly impossible to ignore.
Anyone who has worked through a major remediation programme in this sector will recognise the shape of it. The conduct issue emerges. The regulatory response follows. And then the operational reality of responding at scale becomes the defining challenge, often far more costly and complex than anyone anticipated.
To be clear: in none of these cases did operations cause the underlying problem. The conduct issues that triggered motor finance redress originated in commercial decisions about commission structures, not in back-office processes. But that distinction, while important, doesn't reduce the operational challenge. It reframes it.
Operations didn't create this situation. But operations is precisely where the ability to respond either exists or does not.
Legacy systems were built to process transactions, not to justify decisions or demonstrate fairness. The capacity to trace historic data, assess fairness at scale, and evidence outcomes to a regulator lives in the operational foundations. That gap existed long before the FCA's investigation began. The ruling simply made it consequential.
This is what we mean when we say, in our whitepaper "The New Shape of Financial Services Transformation", that regulation is exposing, not causing, the problem.
The real question is not about motor finance
For leaders at firms not directly in scope today, the temptation is to treat this as someone else's problem. I'd encourage a different question.
When the next regulatory moment arrives, and it will, will your operations be capable of responding?
Across financial services firms in the UK, operating models have accumulated layers of process, system logic and organisational structure over decades. Each addition made sense at the time, but the cumulative effect is operations that are increasingly difficult to understand, change and evidence. That complexity sits beneath the surface of most organisations in the sector, and it doesn't announce itself. It waits for the moment when a regulatory event, a market shift, or an operational incident forces it into the light.
The uncomfortable truth is that most firms are carrying more of this than their governance frameworks, risk registers or transformation programmes currently reflect. The pace at which regulatory expectations are moving, toward outcomes-based assurance, continuous evidence, and personal accountability under SM&CR, means the window for addressing it on your own terms is narrowing.
When these moments arrive, the instinctive response is to add. More resource, more oversight, more governance forums, more sign-off layers. It feels like control. In practice, it compounds the underlying complexity rather than addressing it.
Our research across financial services in the UK consistently shows that organisations resolve operational issues through escalation and workarounds rather than structural change, that governance increases year on year while confidence in control does not, and that 40-60% of operational effort goes into reconciliation and exception handling rather than value-adding work. Those are the conditions in which the next regulatory moment is being quietly incubated.
The firms best positioned to absorb the next event, whatever form it takes, will not be those that respond fastest when it arrives. They will be those who have already simplified the foundations: clarified end-to-end ownership, reduced process fragmentation, and built operations that can demonstrate how work flows and how customers are treated, by design rather than by effort.
Simplify before the moment arrives
The motor finance scheme is a live illustration of what it costs when a large-scale regulatory demand lands inside operations that weren't built to support it. The conduct issue originated elsewhere. But the operational complexity is what determines how painful, how expensive, and how visible the response becomes.
That cost is avoidable, but only if the work happens before the event, not in response to it.
Most organisations in this sector are closer to this position than they realise. The firms that won't be caught out are the ones doing the work now, not when the moment arrives.
We explore more about 'The Real Cost of Complexity in Financial Services' in our blog.