As the deadline for Consumer Duty board reports on 31st July 2024, approaches, many firms are grappling with several common challenges. From defining desired customer outcomes to documenting actions taken, these challenges can hinder the effectiveness of your board report. To ensure your report is comprehensive and meets the requirements, consider the following common issues and practical tips.
Common issues
- Lack of defined customer outcomes: Many firms have not yet agreed upon the specific good outcomes they aim for their customers to receive. Without these defined outcomes, it is challenging to assess performance accurately.
- Unclear management information: Firms often struggle with identifying or accessing the necessary management information or data required for their assessments. In some cases, the available information is minimal or insufficient.
- Undocumented issues and actions: When firms identify issues, risks, or harms caused by their products or services, they frequently fail to document these problems or the actions taken to address them, including planned future actions and timelines.
- Detailed policies without effectiveness assessment: Some firms provide extensive details about their policies and processes designed to mitigate customer harm. However, they do not assess whether these policies and processes are effectively delivering good customer outcomes.
- Statements of intent rather than action: Firms sometimes describe what they “should” be doing instead of what they are actively doing to meet the Consumer Duty requirements.
Practical tips for effective board reports
- Define desired customer outcomes: Clearly define the good outcomes you want your customers to receive under the three cross-cutting rules and four Consumer Duty outcomes. This will provide a clear benchmark for your assessments.
- Identify necessary management information: Determine the management information and data required to support your assessment. Assess whether the information you have provides a clear picture of your firm’s performance in delivering good customer outcomes. If there are gaps, seek to obtain the needed data quickly or find suitable alternatives.
- Assess customer outcomes using data: Use the identified management information and data to assess whether your firm has delivered the good customer outcomes you committed to. This step is crucial for an accurate and honest evaluation.
- Document assessments in the report: In your board report, document the results of your assessments and the management information and data you relied on. This transparency will demonstrate your thoroughness and accountability.
- State issues and actions clearly: Clearly state any identified issues, risks, and harms, providing an overview of how you have addressed these problems when they have occurred. For any actions that remain outstanding, detail your plans to resolve them and provide timelines.
- Align future strategy with Consumer Duty: Comment on how your firm’s future business strategy aligns with the commitment to deliver good outcomes under Consumer Duty. This alignment will show that your firm is not only compliant but also forward-thinking.
- Focus on current actions: Emphasise what your firm is currently doing to meet Consumer Duty, rather than simply detailing what the FCA expects you to do. This approach ensures your report is action-oriented and reflective of your firm’s actual practices.
Register for the FCA’s “One Year On” Livestream
Stay informed and gain insights into the latest developments in Consumer Duty by registering for the FCA’s “One Year On” livestreaming event. Join the livestream on 31st July at 9 am EU/London time. The event will focus on:
- The impact the Duty has had in its first year
- Examples of good practice and areas for improvement
- The FCA’s priorities for the year ahead
How Neopay can help
At Neopay, we understand the complexities and challenges firms face in preparing Consumer Duty board reports, especially given the lack of specific FCA templates and frameworks. Our expertise in compliance and regulatory requirements allows us to offer tailored solutions to help your business effectively document and demonstrate adherence to Consumer Duty principles. From comprehensive compliance audits and workshops to specialised training sessions, we ensure your reports cover all essential components, reflect best practices, and align with the FCA’s expectations.
Contact us today to learn more about our services and how we can support your business in maintaining compliance with the Consumer Duty requirements.
