In a recent speech on 1st November, Nisha Arora, Director of Cross Cutting Policy and Strategy at the FCA, highlighted the ongoing commitment and challenges faced in meeting the Consumer Duty. The Consumer Duty introduced by the FCA has seen significant shifts in practices, aiming to ensure improved outcomes for consumers. Three months into its implementation, the positive practices witnessed underscore the importance of this initiative. Continuous momentum in this direction will yield more benefits, not only for consumers and firms but for the UK as a whole.
A Continuous Commitment to Improvement
The Consumer Duty isn’t merely a one-time obligation. Firms need to focus on constant learning and improvement, substantiating these efforts in their annual board reports. Those with closed products and services should verify their progress to meet the 31 July 2024 implementation deadline.
This Duty remains a top priority for the FCA. They will persist in evaluating firms’ implementation and embedding across all sectors, actively promoting good practices to fortify the industry.
The Need for the Consumer Duty
The latest Financial Lives survey findings reinforce the pressing need for this Duty. A substantial number of adults had failed attempts at contacting their financial services providers, while vulnerable groups encountered less helpful customer support services. Consumer trust in the UK financial services industry is low, emphasising the necessity of the Consumer Duty.
Amid this climate, the duty has elicited good practices. Firms are simplifying communication, being transparent about exclusions, and evaluating their fees. The FCA lauds the efforts made by firms in adjusting their practices and meeting the deadlines.
Preparing for Continuous Change
Continued vigilance is paramount; the Consumer Duty must become an integral part of a firm’s culture, permeating every aspect from strategy to customer service. Shifting to this approach requires an introspective assessment of consumer outcomes, understanding and evidencing these results, particularly for different consumer groups, especially the vulnerable.
For firms, it’s not time to ease off; rather, the work to embed the Duty has only just begun. It requires continuous monitoring, assessment, and improvement. The Duty will extend to closed products and services from 2024, where firms need to anticipate how it will apply to them.
The FCA will persist in reinforcing their approach and mindset, integrating the Duty in every regulatory interaction. Their emphasis will be on intervening quickly in markets to rectify poor consumer outcomes, demonstrating the Duty’s crucial role in ensuring fairer financial services for all.
Upcoming FCA Consumer Duty Webinar
The FCA is hosting a webinar on December 6, 2023, from 10 am to 11.30 am, which will focus on helping firms comprehend the regulator’s expectations now that the Consumer Duty is in force. The discussion will include the FCA’s supervision and enforcement approach, sector-specific areas of focus, examples of good practice and the next steps for firms. Open to regulated firms, trade associations, professional bodies, and compliance consultants, this webinar will allow participants to submit their queries during registration. Interested parties can register here.
How Neopay can help
The Consumer Duty requires firms to consistently ensure better outcomes for consumers. We offer services such as compliance audits, workshops, and training, helping firms adapt to the evolving regulatory landscape with confidence.
With Neopay, you can benefit from tailored solutions designed to meet your specific needs. We help you establish effective review processes, implement best practices, and ensure your firm delivers value to customers while remaining compliant. Contact us today to learn more about our services and how we can support your Consumer Duty requirements.
