[INSIGHTS]: Consumer Duty: The next steps, FCA, webinar

The Financial Conduct Authority (FCA) webinar, delved into the implementation and next steps for the Consumer Duty. The session brought together industry experts to discuss the embedding of the duty in organizations, with a focus on expectations, sector-specific insights, and practical guidance for compliance. The panel highlighted the ongoing nature of the duty, emphasizing continuous improvement in consumer outcomes and firm practices.

Key Points

  1. The Consumer Duty is an ongoing commitment requiring firms to consistently prioritize consumer needs and outcomes.
  2. The implementation involves not just a one-time exercise but a continual review and improvement process.
  3. Nisha Aurora, Director of Cross-Cutting Policy and Strategy, emphasized the importance of focusing on consumer outcomes and using data for evidence-based assurances.
  4. The session underscored the significance of reviewing closed products against the highest standards of the duty.
  5. Annual Board Reports are a critical internal governance tool for assessing firm compliance with the duty.
  6. The FCA encourages firms to be proactive and not rely solely on regulatory intervention for compliance.
  7. Key areas of focus include fair value, vulnerability, information sharing, and closed products.
  8. The importance of understanding customer characteristics, especially those in vulnerable circumstances, was highlighted.
  9. Outcomes monitoring should involve a structured approach to assimilating and analyzing data for decision-making.
  10. Proportionality in approach is recognized, with smaller firms having different capabilities and complexities.
  11. The FCA aims to intervene less but more assertively and quickly where necessary.
  12. The ultimate goal is to build consumer trust and confidence, leading to healthier competition and economic benefits.

Key Statistics

  1. 72% of webinar attendees felt confident about successfully embedding the duty in their sectors.
  2. 61% of firms felt they were on track with preparing for the closed products deadline.
  3. 49% of portfolio managers and 69% of stockbrokers identified no vulnerable customers, highlighting a gap in vulnerability assessment.
  4. The Consumer Duty has been live for four months at the time of the webinar.
  5. The deadline for closed products compliance is set for July 31, 2024.
See also  [INSIGHTS]: BoE Consumer Credit Conditions Deterioration

Key Takeaways

  • The Consumer Duty requires ongoing commitment and continuous improvement.
  • Firms should focus on consumer outcomes and use data to monitor and assure these outcomes.
  • Reviewing closed products against the duty’s standards is crucial.
  • Annual Board Reports play a vital role in internal governance related to the duty.
  • Firms are encouraged to be proactive in compliance, not just reactive to FCA interventions.
  • Critical focus areas include fair value, vulnerability, information sharing, and closed products.
  • Understanding the characteristics and needs of all customer cohorts, especially vulnerable ones, is essential.
  • Effective outcomes monitoring involves structured data analysis and action-oriented decision-making.
  • Smaller firms should approach the duty proportionally, considering their capabilities and product complexities.
  • The FCA aims to reduce the frequency of interventions but increase their assertiveness and speed.
  • The ultimate objectives are to enhance consumer trust, stimulate healthy competition, and contribute to economic growth.
  • The Consumer Duty is not a one-time compliance exercise but an integral part of firms’ operational ethos.

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