FCA publish examples of good and poor practice ahead of Annual Consumer Duty Report deadline
FCA have published examples of good and poor practice in relation to firms’ implementation and ongoing work to embed the Consumer Duty. FCA have repeatedly said complying with the Duty is not a “once and done” exercise and these findings should act as yet another reminder of this. Firms are expected to consider the findings and take prompt action where gaps against are identified.
One of the six areas commented on is Culture, governance and monitoring, which provides some timely practical advice with just months to go until firms are expected to produce their first annual Consumer Duty Board Report. Examples poor practice firms should ensure they avoid include:
Firms should not just repackage existing data to monitor and evidence the outcomes customers are receiving. New and better data to understand firms’ customers is key.
Ensuring good customer outcomes should not be the responsibility of risk and compliance teams only. It should be owned across the business and discussed at Board level.
Firms should not wait until the FCA intervene to address issues identified. Appropriate governance should be in place so that action is taken where problems are identified.
Further examples of good and poor practice are provided in relation to other core areas of Consumer Duty, including:
Vulnerable customers
Products and services
Price and value
Consumer understanding; and
Customer support
Whilst some of the examples refer to particular markets or products, FCA have said it expects all firms across retail sectors to benefit from considering them. Therefore, we recommend firms measure their performance against these findings and assess whether further work is needed. Firms found to be “lagging behind” and risking poor customer outcomes should expect FCA intervention.
If you would like to discuss your firm’s approach to Consumer Duty or need assistance with preparing the first annual Consumer Duty Board Report, please get in touch.