With time ticking on and just over one month to go until the Consumer Duty deadline, firms must ensure that they have all the correct tools in place to test, understand and evidence the delivery of good consumer outcomes. The industry knows that the FCA’s target is for firms to become agile in implementing new products and services in order to embed the delivery of good outcomes as a competitive driver within the financial services industry, so what should firms be doing to ensure that they consistently hit the mark?
The key to consistency will be the Management Information(MI) strategies that have been implemented throughout the past 12 months. These strategies should have tools embedded within them, for example, control frameworks or new MI dashboards. Facilitating engagement with these strategic tools across the organisation will be instrumental to monitoring compliance with the Duty beyond July 2023.
The FCA’s recent Fair Value Framework analysis reiterated the importance of regular monitoring using the example of fair value assessments. It highlighted the significance the firm must place on proactively monitoring whether its pricing structure accurately reflects the benefits and financial fulfilment its target customer base receives. This, combined with the FCA’s expectation that firms must have the ability to capture accurate information, sets out the monitoring standard that should be met consistently over the coming years to embed the delivery of good outcomes under Consumer Duty.
As to be expected with any regulation, the provision for monitoring does not begin and end solely with having the functionality to collect this MI. The ability to process, utilise, and action MI is only valuable so far as firms use it to actively deliver good customer outcomes, by identifying potential shortcomings in customer service (such as long waits to speak to a customer service representative) or opportunities to improve product governance and pricing. This is where the tried and tested acronym “PEEL” can come in handy. Firms can use this to ask themselves if their MI strategy is well-rounded and delivers on these key expectations:
- Point – identify which of the four outcomes the firm is aiming to monitor with this strategy.
- Evidence – what relevant tools (e.g., an MI dashboard or new set of procedures) does the firm have at its disposal to collect the relevant information?
- Explain – what does the information suggests (gaps in the delivery of good outcomes?), where is the information stored, and which stakeholders analyse it.
- Link – what remedial actions have the firm taken and how does that ensure good outcomes for their target market?
Firms need to strongly consider the impact of their actions following the monitoring that is performed and consistently ask themselves if these remediations are proportionate to the audience impacted.
The FCA is undoubtedly going to be knocking on doors in search for examples of good practice and, more importantly, areas for improvement. With that in mind, firms need to ensure that over the next 8 weeks, they have positioned themselves well within the “good practice” zone for business-as-usual on the 1st of August.
How Delta Capita can help
Delta Capita’s UK Consumer Duty team comprises senior industry practitioners and former C-suite banking executives. We support organisations in delivering the changes required to deal with complex challenges, including building monitoring tools and strategies beyond the July deadline.
Whether you need help to assess your Consumer Duty readiness, benchmark your monitoring strategy against industry best-practice or build new MI dashboards, our team can help you as we are helping other organisations with similar challenges.
To find out more about how we can support you, contact us and speak directly to one of our experts.
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