There's been lots of press commentary recently, as the roll out of Consumer Duty gathers momentum. The FCA have already had a peek at the implementation plans of some larger firms and have let it be known that, from what they’ve seen, they are concerned that firms risk not being properly ready by July. The unreadiness may be due to procrastination, uncertainty, or just poor prioritisation, but it’s clear the FCA have serious intentions to ensure that firms get on top of their compliance obligation.
It is clear the FCA want this to be more than just a tick box exercise and are looking for firms to seize the opportunity to improve their customer engagement, as well as demonstrating fair value and good outcomes. There is no specific form for firms to complete or roadmap to follow but the FCA have suggested the areas firms need to focus on.
- Prioritising: Firms should make sure they are prioritising effectively, with a focus on the areas that will make the biggest impact on outcomes for consumers.
- Making the changes needed: The FCA urges firms to ensure they are making the changes needed so consumers receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.
- Working with other firms: Firms need to share information and work closely with their commercial partners to make sure they are all delivering good customer outcomes. The FCA has found that some firms need to accelerate this work to implement the Duty on time.
In their implementation plan review, to help all firms understand their expectations, the FCA have provided areas for improvement and given real-life examples of shortcomings. These include lack of board level involvement in the proper scrutiny of plans, lack of timings for progress updates, and lack of a plan for ongoing assessment that expectations under the Duty are being met.
Dealing with data
The FCA has also talked about wanting to become a ‘data-led’ regulator. Firms will need to have processes and data strategies in place, ensuring they can show evidence that all parts of their organisation understand and are focused on delivering good outcomes for consumers.
Showing evidence of good customer outcomes will require firms to have access to stable and trusted data sets to support a clear set of metrics that precisely capture how well their products and services are meeting customer needs.
Access to the right data at the right time will be crucial for assessments of compliance and there is an expectation that the service provider can provide that data to the FCA when required.
I think we can be quite sure that they will be asking for it.
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