With the Consumer Duty deadline approaching, the Financial Conduct Authority (FCA) has issued a timely warning to financial services firms. The FCA emphasises the importance of readiness and compliance with the new regulations by the 31st of July.
In a recent speech, Sheldon Mills, Executive Director of Consumers and Competition at the FCA, highlighted the consequences for firms that neglect their duty or pose significant harm to consumers. This blog summaries the key points raised by the FCA in this recent speech, and how firms can ensure they meet the Consumer Duty requirements.
Proportionate Supervisory Approach
The FCA stresses that its supervisory and enforcement approach will be proportionate to the harm or risk of harm to consumers. Firms should prioritise delivering positive outcomes for consumers, as failure to do so may result in robust actions, interventions, investigations, or disciplinary sanctions. Compliance with the Consumer Duty is crucial to avoid adverse consequences and maintain consumer trust.
Sheldon Mills acknowledged the efforts made by financial services firms in implementing the Consumer Duty. He highlighted the potential benefits of the Duty, including improved consumer protection and increased competitiveness within the sector. By prioritising customer-centric approaches and delivering better outcomes, firms can retain and attract customers while enhancing the overall competitiveness of the financial services industry.
Ensuring Fair Value
To support firms in meeting their obligations, the FCA is sharing findings from its review of fair value assessment frameworks. This review highlights areas of good practice and provides guidance for further consideration. Firms need to focus on collecting evidence to demonstrate that their products represent fair value and establishing clear oversight of actions to be taken if products fall short of this requirement. Prioritising fair value ensures consumers receive products and services that meet their needs and offer fair pricing.
Consumer Communications and Support
Under the Consumer Duty, consumers should receive communications that are clear and understandable. Firms must ensure that their products and services cater to consumer needs, offer fair value, and provide timely customer support when required. By meeting these expectations, firms can enhance customer satisfaction, retention, and loyalty.
How Neopay can help
Neopay is your trusted partner for navigating the complexities of the Consumer Duty. We offer facilitated workshops to help firms define their reviews and identify gaps in their implementation, ensuring compliance with regulatory requirements. Our team provides expert advice and support throughout the entire Consumer Duty journey.
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 implementation.
For everything you need to know about the Duty and the requirements for your business, check out our dedicated FCA Consumer Duty section for the latest updates.