The Financial Conduct Authority (FCA) continues its commitment to guiding firms on embedding the Consumer Duty by publishing two insightful reports. These documents highlight both exemplary practices and areas requiring improvement, offering invaluable guidance to ensure firms meet regulatory expectations and deliver positive outcomes for consumers. Here, we highlight the key findings of these reports and how Neopay can support your compliance journey.
Key highlights from the FCA’s reports
1. Consumer Duty Board Report
This report evaluates firms’ governance structures and their alignment with the Consumer Duty’s objectives. The FCA identified the following:
- Good practices:
- Clear outcomes focus: Firms that provided dedicated sections for the four consumer outcomes and detailed what good outcomes looked like.
- High-quality data: Effective use of Management Information (MI) to support conclusions about consumer outcomes.
- Consideration of customer types: Including vulnerable customer groups in monitoring and analysis.
- Robust processes: Established procedures for report production, involving relevant business areas and governance bodies.
- Culture-driven commitment: Firms demonstrating the influence of a positive culture in achieving Consumer Duty objectives.
- Areas for improvement:
- Data quality: Some firms lacked robust data strategies to justify conclusions about customer outcomes.
- Distribution chain transparency: Limited evidence of effective information sharing with third parties.
- Board engagement: Lack of effective challenge and scrutiny by governing bodies.
- Action plans: Inadequate detail on timelines, accountability, and data used to monitor improvement efforts.
2. Complaints and Root Cause Analysis Report
This report examines firms’ handling of complaints and their ability to identify systemic issues through root cause analysis (RCA). Key observations include:
- Good practices:
- Dashboards and data packs: Integrating complaints data with Consumer Duty outcomes for meaningful insights.
- External insights: Leveraging Financial Ombudsman Service (FOS) decisions and other external sources to complement internal data.
- Structured RCA processes: Creating action plans with clear accountability and deadlines.
- Measuring impact: Evaluating the effectiveness of implemented changes and ensuring they address identified issues.
- Areas for improvement:
- Data granularity: Insufficient segmentation of complaints data to understand outcomes for diverse customer groups.
- RCA effectiveness: Gaps in monitoring the impact of actions taken to address systemic issues.
- Governance: Weak evidence of substantive discussions or challenge on complaints data at board levels.
- Training: Need for enhanced training to support staff in handling complaints effectively and identifying root causes.
How Neopay can help
Achieving compliance with the Consumer Duty requires more than just understanding expectations – it demands proactive measures to ensure continuous improvement. Neopay’s comprehensive services can help firms align with the FCA’s standards:
- Virtual Compliance Services (VCS): We provide ongoing support to help you navigate the complexities of Consumer Duty, ensuring robust frameworks and sustained compliance.
- Audits and gap analysis: Our audits identify compliance gaps and offer tailored recommendations to improve governance, complaints handling, and RCA processes.
- Training and awareness: Engage your team with tailored training programs that foster a deeper understanding of Consumer Duty requirements and empower them to drive positive consumer outcomes.
By leveraging our expertise, firms can confidently address regulatory challenges, enhance operational resilience, and build stronger trust with consumers.
The FCA’s reports serve as essential resources for firms striving to embed the Consumer Duty effectively. Whether it’s improving board oversight or refining complaints handling, the insights provided are crucial for ensuring compliance. At Neopay, we’re here to guide you every step of the way, turning compliance challenges into opportunities for growth.
Get in touch with us today to learn how we can support your journey towards Consumer Duty compliance.
For more information on the Consumer Duty, check out our dedicated Duty section here.
