With only a week to go until the Consumer Duty changes come into effect (31st July), Karan Kapoor, Global Head of Regulatory and Risk Consulting at Delta Capita, a leading managed services, technology and consulting firm, shares three important considerations that firms should keep in mind as the deadline approaches.
- Be ready to provide evidence of your efforts
“The FCA will be looking for evidence that firms have taken the Duty seriously and so firms should be ready to show evidence of the new controls, policies and frameworks that have been created to meet the regulation. This will allow firms to show the regulator that they are not only thinking of how to meet the deadline in the short term, but that they have structures in place to continue prioritising positive customer outcomes going forward.”
- Vulnerable customers are likely to be top of the list for the regulator
“Another testing point will be for firms to evidence that they have considered and acted on the regulator’s call for better support for vulnerable customers. Vulnerable customers are likely to be at the top of the list in the eyes of the regulator.
“This means showing that they have applied a vulnerable customer lens to their customer journeys, so that vulnerable customers are able to make full use of the products they have purchased and achieve good outcomes. Firms will be expected to address instances of negative customer outcomes in a proportionate way, prioritising the most serious cases of harm.”
- Communicate your changes to all levels of your firm
“One of the biggest changes that the Consumer Duty has brought to the industry is an increased focus on not only taking action to do right by customers, but having real proof and evidence that this action is leading to improved customer outcomes.
“As a starting point, firms should measure their actions against the 10 questions recently published by the FCA. These questions are designed to help firms assess the actions that they have taken relating to Consumer Duty and offer them the rare opportunity to identify areas that have been missed ahead of the regulation deadline.
“Finally, employees at all levels of the firm should have a clear and consolidated understanding of what the firm has changed as a result of the Duty. Final reports that summarise the key changes that have taken place across product governance, pricing, communications and customer support, can be a helpful way of ensuring that all employees are up to speed.
“The focus on evidencing outcomes will also involve a fresh look at current Management Information, as firms will be required to show what data and metrics they have captured to monitor the outcomes, and how they will be using this on an ongoing basis in the future to steer and adapt their approach.”