Michael Shand, managing principal at consultancy Capco, comments on the FCA’s Call for Input on refining its conduct rules as a result of Consumer Duty, which closes for comments this Thursday – 31st October:
“This deadline is an important step in refining the FCA’s conduct rules and should be welcomed by the industry.
“Rather than providing particularly detailed, prescriptive rules, Consumer Duty is centred on specific consumer outcomes. As a result, firms are required to interpret these outcomes and ensure—using data and evidence—that they are delivering against these consumer outcomes. The most mature firms will have already taken the opportunity to evolve into this way of working, streamlining their management and oversight of conduct. The review presents a limited opportunity for all firms and industry bodies to suggest specific areas for improvement.
“The potential future benefits include a clearer focus on improving consumer outcomes and reduced costs. However, the FCA must be cautious: simplifying rules and relying too heavily on high-level guidance could lead to ambiguity, as firms might interpret their conduct obligations differently. Before removing too many rules, the FCA should assess firms’ maturity in embedding the Consumer Duty into their culture, recognising the many differences across firms and sectors.”
