On the 1st November 2023 the FCAs Director of Cross Cutting Policy and Strategy, Nisha Arora, gave a speech at a Deloitte event surrounding Consumer Duty. The overarching theme of the speech was to reiterate the FCA’s stance that the Consumer Duty is not a ‘once and done’ exercise, firms need to make sure they are continuously learning and improving, and must be able to evidence this fact in their annual board reports. It was stressed that Consumer Duty should not just be seen as a compliance exercise, but rather that it creates a shift in culture throughout firms towards delivering good consumer outcomes.
Nisha reconfirmed the FCA’s feeling that by meeting the needs and delivering better outcomes for consumers, higher standards and healthier competition will improve trust, support growth and innovation, and in turn improve the UK’s standing on a global stage, which will benefit all parties within Financial Services. Examples the FCA have seen of good practice so far include Firms simplifying language and introducing more accessible formats, firms being more upfront on their websites, and firms reviewing their fees with fair value in mind.
What comes next for Firms?
Firms now need to go back and review their implementation plans, and check that they have made the changes they set out to make. A focus must be placed on whether they are delivering the outcomes they set out to achieve for the consumers in their target market, which special focus placed on customers with characteristics of vulnerability.
Firms should also now be considering their annual board reports, ensuring that a review and approval of an assessment of delivering good outcomes for consumers is taking place. The FCA expects firms to be able to provide this as well as the management information behind it on request.
From the 31st July 2024, the Consumer Duty will also apply to closed products and services, however there may be some differences in how some elements of the Duty will apply.
What firms can expect of the FCA
The Duty is now an integral part of the FCA’s approach and mindset at every stage of the regulatory lifecycle – including authorisations, policy development, supervision and enforcement. Firms should expect it to be a key factor in all discussions that take place between themselves and the regulator.
An early area of focus for the FCA will be to look at firms’ complaints data, identifying where the Financial Ombudsman Service uphold high numbers of complaints. Firms will be held to account for dealing with complaints fairly and also identifying the root cause of the complaint to mitigate the risk it reoccurs.
How Thistle can help?
Thistle can assist firms with:
Link: https://www.fca.org.uk/news/speeches/consumer-duty-not-once-and-done