Consumer Duty
The FCA’s new Consumer Duty sets clearer and higher standards of consumer protection across financial services and requires firms to put their customers’ needs first by delivering good outcomes.
With an implementation date of 31 July 2023 for open products, (31 July 2024 for closed), fscom is supporting clients by offering a range of services and programme accelerators to help financial services firms meet their obligations on time and help them protect their customers.
Webinar
From “Vulnerable Customers” to the new “Consumer Duty”: what does the FCA expect of payment and e-money institutions?
fscom’s Director Alison Donnelly is joined by a panel of experts for a robust discussion.
What is the Consumer Duty?
The Consumer Duty (‘the Duty’) sets the standard of care that firms should give to customers in retail financial markets. The Duty takes the form of a new principle, principle 12, which is added to the Principles for Businesses (PRIN):
“A firm must act to deliver good outcomes for retail customers”.
Complementing the new principle, there are ‘cross-cutting rules’ and ‘four outcomes’ rules and guidance. The cross-cutting rules are grouped around three expectations:
The remaining rules and guidance aim to achieve good outcomes for customers in four areas that represent key elements of the firm-consumer relationship:
Book your free consultation with one of our Consumer Duty experts today
To whom does the Consumer Duty apply?
The Duty applies to the regulated activities and ancillary activities of all firms authorised under the Financial Services and Markets Act 2000 (FSMA), the Payment Services Regulations 2017 (PSRs) and Electronic Money Regulations 2011 (EMRs), in respect of products and services for prospective and actual retail customers.
Each firm is responsible for its own compliance, but the FCA has accounted for the impact that manufacturers of products and services may have on retail end-users, even where there is no direct contractual relationship, and so there are obligations on manufacturers to the extent of their influence.
How far has the payments sector come in implementing Consumer Duty? Read more here.
What are firms expected to do?
Firms must consider how customers and prospective customers are impacted by their business, and review the culture, strategy, processes and controls of governance, price and value, consumer understanding and consumer support.
Implementation plans should have been approved by the end of October 2022. At this stage, consumer duty working groups will be working on implementing the identified actions. There is a significant amount of work to do before July 2023 and we are supporting clients by offering a range of services and programme accelerators to help financial services firms meet their obligations on time and help them protect their customers.
How can we help?
fscom can help your firm be ready by providing our expertise in a number of ways.
Our services include:
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Consumer Duty Validation Exercise
· Conduct an assessment of your consumer duty implementation plan, identifying any issues in relation to your proposed approach or ability to meet the deadline.
· Provide assurance to the Board with report and recommendations.
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Consumer Duty Implementation Support
· A dedicated subject matter expert delivers one or more sub-projects from your implementation plan.
· Key project deliverables will be agreed in advance.
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Consumer Duty Interim Support
· A dedicated subject matter expert joins your implementation working group on a fixed term basis, attending meetings, contributing expert advice on the application and implementation of the Duty and providing support on the delivery of the plan.
· A retainer of support will be agreed in advance.
Alison Donnelly
Director
Our programme accelerators include:
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Consumer Duty Mapping Exercise
We work with you to map out your products and services, and develop a prioritisation plan based on potential for consumer detriment (this is important in case it is not possible to fully implement by 31 July deadline). We will map out the target market, define the features, the distribution strategy, the customer journeys and identify the intended good consumer outcomes.
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Consumer Duty Assessment ToolWe will use our consumer duty assessment tool to conduct a comprehensive analysis of your firm’s maturity level against the four outcomes, design of product and distribution, fair value assessment, consumer understanding, consumer support and identify gaps in the strategy, policies, data and reporting and recommend solutions.
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Board Training
We will provide tailored training to the Board of Directors on their responsibilities and obligations under Consumer Duty rules, including how to oversee the firm's compliance with the rules.
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Consumer Duty Frameworks
We use a range of accelerators to help develop frameworks around the four consumer outcomes including: Product Governance Framework, Fair Value Assessment Framework, Compliance Monitoring Framework and Good Outcomes Frameworks.
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Vulnerable Customer Framework
We provide a vulnerable customer framework tool that helps you to identify and support vulnerable customers, including policies, procedures, and training for staff.
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Consumer Duty Change Implementation Programme
We provide guidance on how to implement changes to products, services, and communication to meet the requirements of Consumer Duty rules, including testing and validation. Our programme includes a range of accelerators to make it easy and efficient to implement the changes.
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If you are looking for highly qualified compliance experts to help prepare your firm for the impending 31 July 2023 deadline, contact us today for a free confidential consultation.
