Further guidance on the FCA’s Consumer Duty expectations has been coming thick and fast in recent weeks and months.

In January, the regulator published findings from its review of larger ‘fixed’ firms Implementation Plans, in a bid to spotlight good practice whilst noting key areas for improvement. This gave a clear insight into what compliance expectations firms are facing ahead of the impending 31st July 2023 Consumer Duty deadline.

This comes in tandem with a multitude of podcasts released by the FCA that take a deeper dive into the four outcomes: products and services, price and value, consumer understanding and consumer support.

The interests of the customer

And throughout this process, it’s been well-documented that the Consumer Duty is a cornerstone to the FCA’s three-year strategy, with Sheldon Mills, Executive Director of Consumer and Competition at the FCA, explaining the importance of this new form of regulation:

“We have a world-leading financial services industry which serves its customers, colleagues and shareholders well through competition, innovation and leveraging talent. We want to see boards and senior management further embed the interests of customers into their firms’ culture and purpose.”

The specifics of embedding the Consumer Duty

This programme of engagement has amplified further still, with the regulator publishing a series of sector specific letters to give additional clarity on how the outcome-focused approach will take effect.

Providing the most detailed guidance yet, the letters give crucial advice for firms to take note of amidst their preparations. With an abundance of information contained within each communication, we’d recommend reading not just the relevant letters for your sector, but for others too, to achieve a thoroughly rounded understanding of what is required.

Prioritisation is key

Reducing the risk of poor consumer outcomes – and understanding where the biggest likelihood of this happening is – takes precedence when a firm is considering its Consumer Duty priorities. So it’s wise to focus on making these areas compliant first when evaluating your landscape.

Beyond existing process

In their January findings, the FCA noted that some firms had only superficially considered the requirements of the Consumer Duty or seemed overly confident that their existing processes and policies would fit the bill.

But as the FCA’s style of regulation shifts to a more ‘show me and don’t tell me’ approach, it’s important that firms can evidence how the services and products they provide are meeting the crucial four outcomes.

And throughout its communications, the regulator has signalled that data has a significant part to play and it’s keen to embrace this within its own practice by becoming a more data-led regulator. In turn, firms that embrace a data-led strategy now are sowing the right seeds to achieve evidencable Consumer Duty success.

Gain broader oversight of your plans

The compliance stakes are high as the FCA will be closely watching firms to ensure they’re onboard in this new era of more assertive led regulation. Any serious noncompliant breaches will be met with strict penalties either via interventionist means, fines or remediation.

So, the time is now to seek external support from regulatory experts to validate and provide insight into your firm’s Consumer Duty plans – and achieve independent assurance that you’re on the right track.