The FCA has shared 10 questions for firms to consider ahead of its new Consumer Duty which comes into force on 31 July.
The FCA’s new Consumer Duty will begin on 31 July and will require all regulated firms to ensure that customers are treated fairly at all stages of their ‘customer journey.’
The Duty is a significant shift in the FCA’s expectations and the regulator said its latest firm survey found that the majority of firms weee on course to implement it on time.
With just a month to go until the deadline, the regulator has highlighted 10 key questions for firms to consider:
- Are you satisfied your products and services are well designed to meet the needs of consumers in the target market, and perform as expected? What testing has been conducted?
- Do your products or services have features that could risk harm for groups of customers with characteristics of vulnerability? If so, what changes to the design of your products and services are you making?
- What action have you taken as a result of your fair value assessments, and how are you ensuring this action is effective in improving consumer outcomes?
- What data, MI and other intelligence are you using to monitor the fair value of your products and services on an ongoing basis?
- How are you testing the effectiveness of your communications? How are you acting on these results?
- How do you adapt your communications to meet the needs of customers with characteristics of vulnerability, and how do you know these adaptions are effective?
- What assessment have you made about whether your customer support is meeting the needs of customers with characteristics of vulnerability? What data, MI and customer feedback is being used to support this assessment?
- How have you satisfied yourself that the quality and availability of any post-sale support you have is as good as your pre-sale support?
- Do individuals throughout your firm – including those in control and support functions – understand their role and responsibility in delivering the Duty?
- Have you identified the key risks to your ability to deliver good outcomes to customers and put appropriate mitigants in place?
The regulator said the questions should help firms to reflect on their implementation of the Consumer Duty and identify gaps or areas for improvement
In a speech at financial consultancy EY, Sheldon Mills, FCA executive director of consumers and competition, warned that firms who ignore the Duty and those who pose the most harm can expect “swift and assertive” action.
