Firms need to ensure their Consumer Duty implementation plans due at the end of this month are well thought through and engage with the substance of the Duty, the regulator has said.
Richard Wilson, manager of the Financial Conduct Authority’s Consumer Duty team, explained that while the regulator does not expect firms to have “fully scoped” every aspect of their plans, they must demonstrate that plans are well thought through, deliverable and really engage with the substance of the Consumer Duty.
“We recognise it is a journey and plans evolve,” Wilson said.
“But they do need to have developed their plans enough to assure their boards or their managing bodies, and ourselves if we ask for it, of two key things really.
“Firstly that the plan is well thought through, is deliverable and they’re going to meet the implementation deadline and secondly, that they have really engaged with the substance of the Consumer Duty.
“That they’ve thought about consumer outcomes they want to achieve, they have thought about how they are going to monitor those outcomes and they’ve thought about the key issues in their area and the gaps between where they currently are and where they need to get to, considering the four requirements of the duty, so that they’ve really engaged with the step change that we’re looking to see.”
Wilson pointed out that the regulator will also be looking at plans to see they have properly thought through the level of products and services communications that they need to review and added the regulator may also examine the area of their dependencies with other firms and culture change within organisations.
“For instance, their commercial partners, their outsourcers, other firms in the distribution chain,” Wilson continued.
“Have they thought about how they are going to work with them if data and information needs to be shared between those? Are they working proactively to make sure that happens and the risks that come from that?
“And another area is internally, thinking about how they are going to deliver on the culture change that we want to see.
“So how they are going to make sure that all their staff are thinking and understand their responsibilities under the duty to deliver good outcomes? How are they are going to implement the training and culture change they need within their own organisation as well.”