Summary of E&Y webinar this morning, including a speech from Sheldon Mills from the FCA and a panel on representatives from Financial services.
An interesting focus on MI, evidencing, culture and training really came through in the discussion.
Summary Discussion Points
- The discussion focused on the FCA’s implementation of the Consumer Duty and its implications for the financial industry.
- Sheldon Mills, FCA’s Executive Director, emphasized the importance of firms embedding the Consumer Duty into their culture.
- The panelists represented major banks like Barclays, Lloyds, and Santander, sharing their strategies for implementing the Consumer Duty.
- Lloyds Banking Group highlighted their approach of integrating Consumer Duty into their ongoing culture change program.
- Santander discussed their tiered training system and incorporating consumer outcomes in their policies and standards.
- Panelists mentioned the importance of proactive dialogue with the FCA, stakeholders, and customers to address issues and iterate on the process.
- Vulnerable consumers were identified as a critical area of focus to ensure their needs are addressed and they are not excluded from services.
- Collaboration within the industry was emphasized to support each other in implementing the Consumer Duty effectively.
- The panel acknowledged that implementing the Consumer Duty is an ongoing journey that will evolve over time.
- The discussion concluded with a call for continuous improvement and ensuring a common understanding of the Consumer Duty across the industry.
Key Focus Areas
- Integrating Consumer Duty with culture change: Ensuring that the implementation of Consumer Duty is not treated as a separate initiative but is integrated with ongoing culture change programs within the organization.
- Training and awareness: Developing tiered training systems to create awareness and understanding of Consumer Duty across different levels within the organization.
- Policy and standard updates: Reviewing and updating policies and standards to ensure they reflect consumer outcomes and align with Consumer Duty requirements.
- Embedding Consumer Duty into processes: Ensuring that process changes consider customer perspectives and maintain Consumer Duty principles, while also focusing on efficiency.
- Collaboration within the industry: Working together as an industry to share best practices, learn from each other, and support one another in implementing Consumer Duty effectively.
- Proactive dialogue with stakeholders: Maintaining open communication with the FCA, stakeholders, customers, and industry peers to address issues, learn from feedback, and iterate on the implementation process.
- Vulnerable consumers: Focusing on identifying and addressing the needs of vulnerable consumers to ensure they are not excluded from services and receive appropriate support.
- Continuous improvement and iteration: Recognizing that Consumer Duty implementation is an ongoing journey, and striving to improve and mature processes and practices over time.
- Outcome-focused approach: Shifting from a compliance-driven mindset to an outcome-focused approach, considering the overall customer experience and product strategies.
- Monitoring and measuring success: Establishing rigorous infrastructure and a common language to monitor and measure the success of Consumer Duty implementation efforts.
Areas where discussion is still to be had
- Striking a balance between implementing Consumer Duty effectively and avoiding the exclusion of vulnerable consumers. There is a concern that some customers might be excluded if firms focus solely on compliance without addressing their specific needs.
- Managing the transition from policy implementation to Business as Usual (BAU) activities, as firms need to ensure ongoing compliance and adapt to new processes while maintaining customer-centricity.
- Addressing the uncertainty and complexity surrounding Consumer Duty regulations, as firms work to understand and apply the new requirements within their organizations. Maintaining open communication and collaboration between the industry, the FCA, and other stakeholders is vital to ensure clarity and consistency in implementation.
Actions for firms to take today
- Integrate Consumer Duty with culture change: Ensure that Consumer Duty principles are seamlessly incorporated into the organization’s ongoing culture change initiatives, emphasizing the importance of customer-centricity across all levels of the organization.
- Develop and implement training programs: Create tiered training systems to raise awareness and understanding of Consumer Duty across different levels within the organization. This will help embed the right mindset and behaviors among employees to comply with the new regulations effectively.
- Review and update policies and processes: Conduct a thorough review of existing policies, standards, and processes to ensure they align with Consumer Duty requirements. Make necessary updates to prioritize customer outcomes and focus on vulnerable consumers, while also addressing efficiency and risk management considerations.
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