John Moret, Chairman of IIC proposes a new ”consumer duty” dashboard in its response to the FCA’s Consumer Duty consultation (CP21/36)
IIC welcomes the progress the FCA has made with its Consumer Duty consultation
The need for monitoring and reporting has been strengthened
Introducing an annual return through a simple dashboard would ease monitoring and help compliance with the new “consumer duty”
In its response to the recent FCA Consumer Duty consultation paper CP21/36, Investor in Customers (IIC) the independent customer experience and insight business said it was pleased with the further proposals included in the consultation paper and was encouraged by the additional detail on the need for monitoring and reporting.
John Moret, Chairman, of Investor in Customers said: “We are really pleased to see the further proposals in the FCA’s latest consultation paper CP21/36 and very encouraged that the industry comments regarding the need for ongoing monitoring and reporting have been taken into account.
“We continue to support the consumer principle and the cross-cutting rules. We also endorse the four outcomes that are proposed and believe that the justifications for the renaming of the “communication” outcome to “consumer understanding” and “customer service” to “consumer support” are sound. On this last point we agree that it is essential to assess the whole customer experience and journey rather than simply focus on a narrow measure of customer service.”
The financial services sector is at a crossroads, and it is important that all firms no matter how large or small treat the new consumer duty proposals seriously. Priority must be given by all regulated businesses to the information gathering and reporting requirements particularly as the timetable for implementation is short.
IIC also stressed that it is vital the new consumer duty proposals are consistent with other new requirements such as those outlined in PS21/12, detailing the assessment of value for money in workplace pension schemes.
John added: “Our experience with organisations that were and are subject to the “treating customers fairly” regime is that many firms, particularly those of medium and smaller sizes, were slow to appreciate the implications of this requirement at the time it was introduced and in some cases for several years thereafter. The initial FSA monitoring of the regime also seemed inadequate.
“We believe that to ensure success of the new “consumer duty” regime the FCA should consider introducing an annual return through a simple dashboard, which measures the four outcomes and provides evidence that the aims of consumer duty are being met. This would verify that senior managers and staff understand their responsibilities in ensuring that customers receive the support and service they deserve. The dashboard should be an open platform so it is not restricted to a single assessment body but have clearly defined measures to provide consistency and should include an indicator to show whether the ratings were based on an internal or external assessment.”
IIC believes that a dashboard would have four key benefits:
- Ensuring the FCA can quickly and simply measure the success of establishing the new regime
- Impress upon all firms that the FCA will monitor firms’ performance against the new standards
- Encourage all firms to undertake the monitoring suggested in CP21/13
- Lead to firms taking action swiftly to address areas of underperformance
“Regardless of whether the ratings are based on an internal or external assessment we would expect the board to certify that in their opinion the ratings are an accurate assessment of the business’ “consumer duty” performance based on information provided by senior managers subject to the SM&CR regime.”