On the 31st of July, the Financial Conduct Authority (FCA) is introducing a new Consumer Duty that will affect organisations in the financial services industry across the UK. This new obligation is intended to bolster standards of consumer protection specifically for retail patrons of financial services.
The FCA has noted the following additional regulatory requirements:
- “A new Consumer Principle that requires firms to act to deliver good outcomes for retail customers.
- Cross-cutting rules providing greater clarity on our expectations under the new Principle and helping firms interpret the four outcomes (see below).
- Rules relating to the four outcomes we want to see under the Consumer Duty. These represent key elements of the firm-consumer relationship which are instrumental in helping to drive good outcomes for customers.
These outcomes relate to:
- products and services
- price and value
- consumer understanding
- consumer support
Our rules require firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.
Who this affects
This policy and guidance is likely to interest:
- regulated firms, including those in the e-money and payments sector
- consumer organisations and individual consumers
- industry groups/trade bodies
- policy makers and regulatory bodies
- industry experts and commentators
- academics and think tanks
Next steps
The rules and guidance we are introducing come into force on a phased basis:
- for new and existing products or services that are open to sale or renewal the rules come into force on 31 July 2023
- for closed products or services, the rules come into force on 31 July 2024”
Salesforce has helpfully summarised the intentions of this new Duty: “to prevent misleading information from being given to consumers; ensure products and services are fit for purpose; ensure fees and charges are suitable, and to make it simpler to switch products/providers.”
Essentially, this new regulation sets out to ensure that financial services firms make delivering good outcomes and protecting their retail customers a core priority.
With the best tools and insights to work compliantly all on one platform, users of Salesforce will know that this system gives any organisation the power to protect their customers best interests and monitor regulatory compliance. See some of our favourite examples of this nifty functionality below:
- Create consumer duty score cards summarising customer data.
- Benefit from feedback & awareness that is built into the business process to help identify areas for improvement.
- Learn from pre-built vulnerability and data dashboards and lifecycle maps.
- Leverage Tableau to understand compliance from top down – use AI to identify key focus areas.
- Employ all the data & tools required by the FCA to monitor positive outcomes for clients straight from your Salesforce system.
Read more about Salesforce and Consumer Duty at Salesforce.com.
If you have any questions or concerns about these changes, give us a call on 0117 230 2390 or email us at hello@performa-it.co.uk.
PS22/9: A new Consumer Duty: FCA, July 27 2022 https://www.fca.org.uk/publications/policy-statements/ps22-9-new-consumer-duty