The end of last year revealed that fines from the Financial Conduct Authority had dropped to their lowest level since the financial crisis – so much for all the hype about the regulator having teeth and not being afraid to bare them, some might argue.

But, is this really the case? For risk managers, it is certainly looking behind the figures to see where the trends lie It seems that the regulator may well be gearing up for a fresh onslaught on financial services firms with a strong emphasis on ensuring new rules are being adhered to.

In 2016, the FCA handed out 23 fines worth £22.2 million, which was down from 40 in 2015 when the total was £905 million. Notably, there were no major scandals as seen with Forex and the Libor interest rigging and this was a key reason for lower fines. The regulator was also heavily involved in establishing new regimes that will impact on this year and beyond.

And notably, while the fine figures may have been down, there were still some big names in the firing line. These included Aviva which was fined £8.2 million for weak oversight of an outsourcing firm dealing with client money. Insurance intermediary Towergate was meanwhile fined £2.6 million for failing to protect client and insurer money, while wealth manager WH Ireland was hit with a £1.2 million fine for not addressing market abuse issues.

The regulator has denied it has resorted to less rigorous tactics. In January, Mark Steward, the FCA’s head of enforcement, told City lawyers at an industry event that a “light touch had not returned” and that the FCA had no plans to move towards fewer large fines. The regulator has insisted it is not afraid to step in early and that it is both focused on City wrongdoers as well as engaging closely with consumer groups.

Pundits tend to agree that the FCA is the right model. Through setting up two regulatory bodies, the aim was to ensure a system where the Prudential Regulatory Authority oversees solvency issues, allowing the FCA to concentrate on products and behaviors.

And it is expected in 2017 that a key regulatory focus will be anti-money laundering and this is an area that risk managers will need to have high on their agendas. There are understood to be a number of investigations ongoing and the FCA’s new Financial Crime Return will result in tighter supervision and replace ad-hoc data collections.

The Market Abuse Regulation is a new introduction and will bring more cases to light this year through the establishment of a framework prohibiting insider dealing and unlawful disclosure of insider information.

Next, the Senior Managers Regime is bedding in, resulting in more onerous responsibilities for supervisors.

No regulator is perfect and the FCA will continue to attract criticism, but it is showing it will take action on numerous fronts. While LIBOR showed it would take on the City, it is also seeking to raise consumer credit standards and stating that consumers must be treated better. At the same time, it wants to raise financial awareness by pushing the need for better advice at all levels.

The FSA failed to respond early enough to PPI misgivings and instead became embroiled with arguments from lawyers who said there was little or no consumer detriment with the product. The FCA however, did step in and although the PPI debacle is now drawing to a close, it has resulted in pain for those institutions involved in selling it.

The takeaway message is that the FCA’s enforcement division is not asleep on the job and it certainly seems likely that 2016 may well be an anomaly in terms of a relatively low level of fines. The regulatory environment is indeed tightening and now is the time for risk managers to ensure they have set up the right defenses to avoid being targeted in the months ahead. As for 2017 fines, there is every right to fear these could be on the up.