Consumer Duty

Firms will be focussing on preparing for their Consumer Duty Board report  which is a requirement for regulated firms to have by 31^st July 2024. This is not a tick box exercise and firms need to be preparing for this now.

We have held a webinar on this topic to help clients understand what is required  and here are some ways in which we can assist firms in this area:

• Project planning – providing an outline plan and key deliverables to produce the report on a firm by firm basis.
• Dry-runs – I think we should be recommending this to all clients and support them in reviewing their initial data/draft reports and providing feedback commentary.
• Board/Executive briefings on a firm by firm basis – explaining their role and remit and supporting them in devising an implementation plan and being able to ‘evidence’ their findings.
• Support firms in determining the best actions to take to address risks/improve outcomes and articulating any changes to firm strategy as a result.

The  Consumer Duty has brought in a fundamental change to the way we need to approach compliance with FCA regulations.

Combining our FCA and industry expertise, we are well placed to support you on this ongoing journey.

Working in our industry, we are used to dealing with both FCA regulations and massive change. The  Consumer Duty has bought  both. The new regime has been in place since 31^st July 2023, and we are now in the Business as Usual (“BAU”) phase. FCA have made it clear that the Consumer Duty is not a “once and done” matter, and it remains a key priority for them. So, what challenges does this new phase of the regime bring and how can Create help you meet them?

We have already had our first taste of BAU under the new regime, with the second round of  product governance and price and value work that had to be completed  by 30th September 2023. FCA have expressed concern about the robustness of these reviews as it has not seen the level of change e.g., product withdrawals, it expected. We appreciate that these reviews can be onerous and time consuming. Our work with clients suggests that following the key steps in our processes (which can be found in the Stockroom) will provide both the required outputs and evidence. We can provide support for and reviews of this work.

Next comes work on what many see as the core of the new regime, working on meeting the requirements under the Customer Understanding and Customer Support outcomes. In the implementation phase, this  involved work such as mapping and reviewing your customer journeys and all the customer touchpoints within them. Then reviewing all the customer communications within those journeys and the support options available to them. This remains an ongoing part of BAU, and we recommend that you continue to use your Implementation Plan to record this as well some form of “consumer duty log” to record ad hoc actions and decisions.

To ensure that customers have received good outcomes, you will need to “Outcomes Test,” this is checking what the customer has seen, heard and experienced. Management Information (“MI”) is important here, there are tools and training in our Stockroom to help with both, and we can provide tailored support.

All this work feeds into the key addition to the BAU regime, the need to complete a Post Implementation Review (once off for 2023/2024) and an Annual Board Review (every year from 2023/2024) by 31^st July 2024. Core to this is identifying which groups of customers have experienced poorer outcomes than others e.g., those with a particular vulnerability, and deciding what to action to take to rectify this.

These Post Implementation and Annual Reviews form the core of our Compliance Reviews with clients for 2024, there are tools and training in our Stockroom to help with both, and we can provide tailored support.

Underpinning this is the need to support the firm and its customers Consumer Duty journey by at least annual staff training. Create has online and face to face options to support here.

Consumer Duty remains a key priority for FCA, and we have already seen them acting where they see poor outcomes for customers e.g., low settlement offers and lengthy delays settling claims. FCA have made it clear that they DON’T see the Consumer Duty as a “once and done” activity, so we can expect more information gathering and market interventions from them as we settle into this new BAU phase.

So  FCA Senior Management Function holders (“SMF’s”), need  to be ready to show the FCA that they are providing “good outcomes” to all their customers, identify where they are not and have plan to address this. Key to this is effective MI, Outcomes Testing and a robust Annual Board Review.

We appreciate that this can look daunting, and our conversations with clients are already telling us that keeping your business focussed on this and developing meaningful Outcomes Testing programmes  are issues.

With that in mind, we have developed a range of services to help you with this journey. Here are just a few:

• Help your firm /board and senior management understand what is required in preparing the Consumer Duty Board Review (before 31 July 2024)
• Outcome testing; design, perform and coach in outcome(s) testing for your firm
• Independent reviews of how you have embedded the Consumer Duty
• Deliver staff training/coaching/assessments on the Consumer Duty, additional Code of Conduct rule, other new rules , customer service/soft skills, dealing with vulnerable customers training for staff
• Review customer communications, website, social media, scripts, and sales processes for customer understanding.
• Provide guidance on relevant Management information and reporting