The FCA's Annual Public Meeting is an important opportunity for FCA execs to do some market messaging.
And this year, when it comes to the Consumer Duty, they delivered, with a tag-team between Ashley Alder (Chair), Nikhil Rathi (Chief Executive) and Sheldon Mills (Executive Director, Consumers and Competition).
According to Alder, in the coming months and years the Consumer Duty will be "incredibly important" as "a kind of wrapper as to how we approach a whole host of consumer issues". And the FCA board will be "very, very focused" both on customer outcomes and the supervision of firms in the Consumer Duty context.
Most immediately, the FCA says it will:
- Look at specific markets (such as equity release, and savings) and set out its expectations. This will include giving "more transparency" in relation to the outcomes they're looking for. An example: the FCA disclosed some of the cash savings rates it was seeing, to help inform customers as they shop around.
- For larger and some mid-size firms, conduct more "proactive one-to-one supervision by our fixed firm supervisors" around harms the FCA is focusing on or the opportunity the Consumer Duty provides.
Some key areas for firms to attend to:
- The FCA wants firms to "continually improve on" their collection and analysis of data about customer outcomes. And it's not just about demonstrating that the expected customer outcomes are being achieved, and working to improve those outcomes. It's also about demonstrating "the processes and … customer journey" for the products and services you're supplying. Data is an important part of the FCA's strategy, and Sheldon says "you will see us asking for more data" and "you will see us using that data more in order to identify where we see harms".
- It's important to get your leadership right. The Consumer Duty is about "a change in mindset, and the best firms have been ones where leaders from the board, the executive, and throughout the firm, have engaged with the duty".
- The FCA is looking for firms to be "much more proactive in communicating with their customers". (Something of which cash savings providers now are very much aware.)
Getting the measure
While many of these points are not new, the repeated emphasis on data is striking. Monitoring and inter-firm information exchange are some of the most challenging aspects of the Consumer Duty. The FCA does recognise the need for continuous improvement here, but it's not shying away from keeping the pressure on. The best thing for firms to do at this point is to meet the challenge head-on so they have a good story to tell about continually improving their data collection and analysis.