Deadlines are approaching FAST – if you are a financial services provider then you need to ACT NOW or risk being the focus of an FCA review.
On the 3rd of February, the Financial Conduct Authority (FCA) sent a clear message to the financial services industry through its sectoral ‘Dear CEO’ letters.
These communications emphasise the centrality of Consumer Duty to the regulator’s three-year strategy – with a clear expectation that the rules represent a ‘top priority’ in 2023 for financial services leaders.
Consumer Duty is enshrined in the FCA’s Policy Statement PS22/9 and Finalised Guidance FG22/5. It requires firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey.
More specifically, the FCA has identified four outcomes it wants to see firms delivering under the Consumer Duty framework. Each outcome represents a key element of the firm-consumer relationship:
- Products and services
- Price and value
- Consumer understanding
- Consumer support
As well as acting to deliver good customer outcomes, firms will need to understand and proactively evidence whether the outcomes are being met.
Timeframes in 2023 for delivering against the Consumer Duty rules will be challenging:
- By the end of April, manufacturers of products and services should have completed all reviews necessary to meet the outcome rules and shared necessary information with their distributors
- The rules come into force on 31 July 2023 for new and existing products or services that are open to sale or renewal
Valcon’s consulting team can provide the specialist knowledge and project management support you need to demonstrate that your business is meeting the requirements of the Consumer Duty.
Act now, prepare the assessment and develop a plan that is executable in a sensible timeframe – this is the first thing the FCA will expect you to have and will allow your organisation to progress at its own pace vs under close scrutiny.
This small up-front investment could save you thousands in remediation or catch up costs if your organisation is found to be at the back of the pack.
If you would like to speak to Valcon about how we can help your business comply with the FCA’s Consumer Duty, please get in touch at [email protected]. Alternatively, learn more about our expertise in financial crime prevention here.