The chief executive of the Financial Services Authority has warned lenders that they face more intensive regulation and greater scrutiny over their treatment of consumers under the incoming Financial Conduct Authority (FCA).

Hector Sants (pictured), speaking at the British Bankers’ Association conference, claimed the FCA will address structural deficiencies in whole sectors and market places where it judges there to be impairments on consumer choice and experience. It will also focus intensively on the way lenders manufacture and sell products, and the way firms are governed, with a view to making product-based interventions where harmful products are identified.

Where the new body judges that failure has occurred, it will seek redress and compensation for consumers with the aim of obtaining credible deterrence against other lenders engaged in harmful practices.

Sants added: "This approach will be based on the premise that the degree of consumer detriment seen over the last decade has been at an unacceptable level to society and that a more interventionist style of regulation is justified."

Sants also revealed that the FCA will oversee 27,000 firms, of which the FCA will have prudential responsibility for around 25,000 with responsibility for the remaining 2,000 shared with the Prudential Regulatory Authority.