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FCA’s multi-firm review: key findings on Consumer Duty outcomes monitoring

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The Financial Conduct Authority (FCA) recently published the results of a multi-firm review focusing on outcomes monitoring under the Consumer Duty. This review, which analysed practices across 20 major insurance firms, provides critical insights relevant to all retail financial services firms.

Overview of the review

The FCA’s review aims to ensure that firms are effectively monitoring and achieving good consumer outcomes as required by the Consumer Duty. The findings highlight the importance of robust data collection and analysis in understanding and improving customer experiences.

Key findings

  1. Data utilisation and analysis: Firms are leveraging a variety of data sources to monitor consumer outcomes. However, the FCA emphasised that merely collecting data is not enough. Firms must also analyse this data to identify trends and potential issues proactively.
  2. Consumer understanding and support: Ensuring that consumers understand the products and services they are purchasing is paramount. The FCA found that some firms excel in providing clear, accessible information, while others need to improve their communication strategies to prevent consumer confusion and poor decision-making.
  3. Outcome metrics: The review noted a range of metrics used by firms to assess outcomes, from customer complaints and satisfaction surveys to retention rates and claims ratios. The FCA recommends that firms adopt a holistic approach, combining quantitative and qualitative data to get a comprehensive view of consumer outcomes.
  4. Governance and accountability: Effective governance structures are critical in ensuring that consumer duty principles are embedded within firms. The FCA highlighted that senior management must be accountable for consumer outcomes and that firms should have clear processes for escalating and addressing issues.
  5. Continuous improvement: Firms are encouraged to adopt a culture of continuous improvement, regularly reviewing and refining their practices to better serve their customers. This includes staying responsive to feedback and evolving market conditions.

Recommendations for firms

Based on the review’s findings, the FCA made several recommendations:

  • Enhance data analysis: Firms should not only gather data but also invest in sophisticated analytical tools to interpret this data effectively and drive improvements.
  • Improve consumer communication: Clear, transparent communication should be a priority to help consumers make informed decisions.
  • Adopt comprehensive metrics: A blend of different metrics should be used to monitor and assess consumer outcomes thoroughly.
  • Strengthen governance: Strong governance frameworks should be in place to ensure accountability and swift resolution of consumer issues.
  • Foster a culture of improvement: Continuous feedback loops and adaptability should be ingrained in the firm’s operations.

By implementing these recommendations, firms can better align with the FCA’s Consumer Duty requirements, ultimately leading to enhanced consumer trust and satisfaction in the financial services market.

For more detailed information on the review and its findings, visit the FCA’s website here.

Upcoming Consumer Duty event: 1 year on

To mark the one-year anniversary of the Consumer Duty’s implementation for new and existing products, the FCA will be hosting a livestreamed event on 31 July 2024. This event will focus on:

  • The impact of the duty: Reviewing the changes and improvements seen in the first year.
  • Good practice and areas for improvement: Highlighting examples of successful practices and identifying areas needing enhancement.
  • FCA’s priorities for the year ahead: Outlining the FCA’s focus areas moving forward.

Speakers will include:

  • Sheldon Mills, Executive Director, Consumers and Competition, FCA
  • Graeme Reynolds, Director of Competition, FCA
  • Abby Thomas, Chief Executive and Chief Ombudsman, Financial Ombudsman Service

Participants will have the opportunity to submit questions during registration and throughout the event, helping shape the panel discussion. This event is particularly relevant to regulated firms and compliance consultants. Registration is required to attend. For more details and to register, visit here.

How Neopay can help

At Neopay, we recognise the importance of regulatory compliance and consumer protection. 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 business in maintaining compliance with the Consumer Duty requirements.

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