Consumer Duty: We all win
5th October 2022Tweet
FCA Executive Director, Consumers and Competition Sheldon Mills has highlighted the benefits to consumers and industry alike of the incoming Consumer Duty regulations.
The new regulations will come into force next July but by the end of October companies will be expected to have strategies in place to prove to the FCA that the Duty can be delivered in time.
Speaking at the Consumer Protection in Financial Services Summit, Sheldon said, “Be in no doubt: the Duty will be a significant shift in what we expect of firms. It means making lasting changes to culture and behaviour to consistently deliver good outcomes. It means putting customers in a position where they can make informed decisions; where they are presented with suitable products and services for their individual needs; and where they receive fair value for those purchases. The duty will require all firms, whether designing, selling or advising on products and services, to put their customers’ needs first.”
He went on to describe the five areas where the Duty will expect companies to deliver.
The first was consumer understanding, which means delivering products with clear information so customers know exactly what they are getting for their purchase.
Meanwhile, businesses will also be expected to tailor their products to suit customers rather than sell them products they don’t necessarily want, and they will be expected to sell these products at a fair price.
To meet Duty regulations, businesses must also provide support to customers through a channel and at a time that suits them, whether that’s digital or non-digital.
Sheldon said, “Change won’t be possible unless driven from the top with strong senior championing and oversight. Boards and senior management have a critical role in overseeing firms’ implementation of the Duty. That’s why we have strengthened the requirements around governance and accountability to ensure senior managers and executives are held accountable.
“Ultimately, when we get this right, we all win: consumers – who will get the right products and services at the price that is fair; firms, who will retain customers and attract new ones; regulators – who will need to step in less often; and most importantly, the wider economy.”Tweet
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