The Financial Conduct Authority (FCA) is introducing a new ‘Consumer Duty’ for retail financial services businesses. The Duty sparks opportunity for firms to drive genuine customer-centricity and for the industry as a whole to reaffirm trust and confidence of customers and wider society.
The Consumer Duty introduces three new elements, so it’s important firms don’t simply see the Duty as setting equivalent standards to the existing TCF principle. Merely increasing focus on complying better with existing rules and principles won’t be enough.
Conversely, there are also a risk of ‘gold-plating’ the implementation, which will cause firms to run out of time and take too much of a ‘tick-box’ approach to the final elements.
Three considerations for firms
1. Think customers first, not compliance
By putting your customers front-and-centre, you'll intuitively comply with the new regulations. Firm must look to define what a customer centric culture means with regards to each of the four outcomes.
2. Embrace the shift
Getting the whole organisation on board will give you confidence your people will always do the right thing. So, define how a consumer-centric culture breaks down into measurable behaviours across each of the four outcomes.
3. Use insight from the regulator as a guide
The FCA has already done a lot of the thinking around how to put customers first. You can also look to work already done, such as that with general insurance, to understand how the regulator understands outcomes like ‘fair value’.
How can we help
We've delivered more than 300 assignments helping financial services firms create opportunity from the challenges that come with managing regulations and risk. We can support you by:
- Mobilising and running your Consumer Duty transformation programme.
- Conducting independence assurance reviews, Consumer Duty 'health checks' and identify opportunities to move best practice into regulatory compliance.
- Cultivating customer-centered service by undergoing culture assessment against the four Consumer Duty outcomes.
- Providing end-to-end solutions to ensure that you are set up to deliver consistently good outcomes for customers.