With the new Financial Conduct Authority (FCA) Consumer Duty deadline fast approaching, it’s important for us to refresh you on what these rules mean for both your customers and your business, including the consequences for not adhering to it.
The new Duty’s aim is to create higher standards for consumers and improve competition in the retail financial services market. This means that dealers will need to demonstrate that they are able to deliver good customer outcomes by the 31 July 2023 and beyond.
So, what exactly does a good outcome look like? A good outcome as we see it, and as per the guidance means considering the needs, characteristics, and objectives of customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.
A simple line to ask yourself to ensure you able to deliver good outcomes every time is “Am I putting the customer’s needs first?”
Acting morally with integrity, transparency and consciously putting customers at the heart of what you do in line with the duty will mean there is better protection for customers but also, for your business.
Falling short of the new Duty can result in significant reputational damage, and potential financial implications. Bigger picture thinking should indicate that the new Consumer Duty sets the tone now for our industry and if not followed, the FCA guidelines could get tighter and have further reach. Best practice with focus on customers at every stage in their dealings with you is the aim.
Our view is that the FCA’s move with the new Consumer Duty is a positive one, we see the benefit of it, and we are implementing changes across the business. We strongly encourage all our partners (if not already done so) to hold a mirror up to themselves: Congratulate yourselves on the things you do well on but also, be honest about where you can and will improve.
You can find out more information via the FCA website.