Neville Hall, Punter Southall Law’s Partner, Risk and Compliance, offers his view on what comes next for businesses when the duty is in place.
Congratulations. You’ve done a huge amount of work to build your consumer duty programme. You’ve clarified the scope and specific application of consumer duty to your business and customers, written new policies and procedures, devised, completed, tested and reviewed detailed consumer duty risk and outcome reviews, agreed responsibilities with all parties in the distribution chain, appointed and trained your board-level ‘Consumer Duty Champion’, reviewed fees and charges, assessed customer typologies and identified those with vulnerabilities, updated terms of business, marketing and sales documents, trained all relevant staff and produced a new suite of MI. All good, maybe a quick pat on the back? Well only a brief one.
From 1 August the onus for firms now shifts from building a consumer duty programme to actually proving it works and is fully compliant ever-after. The FCA have been clear in their expectations:
The Duty is outcomes-based, and a key part of the Duty is that firms understand and evidence the outcomes their customers are receiving. This enables them to monitor their compliance and to tackle potential breaches at an early stage.
We want firms to harness the benefits of data and technology to improve their services and understand the outcomes they achieve for their customers.
It’s now outcomes-evidenced regulation, based on data and analytics. Chapter 11 of the FCA Guidance addresses monitoring outcomes, and ‘suggests’ that the types of information firms may want to collect includes:
Distribution of products/pricing and fees and charges
Training and competence records
Numbers of complaints
Complaints root cause analysis
Results of the regular testing and monitoring required under the outcome rules
Feedback from other parties in the distribution chain
Researching or testing customer experiences
Allowing staff to feed back honestly
Reviewing whether processes and policies are effective
Drawing on external sources of data about consumer outcomes
Collecting and interpreting all this information is a complex task. At Punter Southall, we have highly experienced practitioners in law, risk and compliance and analytics to help you review and test the effectiveness of your Consumer Duty programme. Contact us to discuss further how we can help you.
Speech by Sheldon Mills, FCA Executive Director, Consumers and Competition