Breaking the mould: advanced tips to excel under FCA Consumer Duty


INSIGHT
Published
May 24th '24
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The Financial Conduct Authority (FCA) has always been the watchdog of fair play in financial services. However, with the introduction of the new Consumer Duty standards, the bar has been raised even higher! This isn’t just about ticking boxes; it’s about reshaping the very core of how financial services operate in favour of consumers. So, buckle up! If you thought you knew the ropes, it’s time to learn some new tricks with our advanced tips to excel under FCA Consumer Duty.

 

 Embracing the change: what’s new with FCA Consumer Duty?

 

 Understanding the Consumer Duty basics

Before diving into the nitty-gritty, let’s get the basics out of the way. The FCA’s Consumer Duty aims to ensure that all financial services firms put consumer interests at the heart of their business. Sounds straightforward, right? Well, the devil is in the details. This means:

 

  • Enhancing the clarity of communications.
  • Providing products and services that are fit for purpose.
  • Offering customer support that actually solves problems.

 

The advanced stuff: what does this Consumer Duty really mean for you?

You’ve got the basics down; now let’s spice things up! Excelling under the new duty means not just following the rules but being ahead of the curve. Let’s unpack this.

 

Strategies to shine under FCA Consumer Duty

 

 Strategy 1: turn data into your best friend

  • Analyse consumer behaviour: dive deep into your customer data to understand needs and pain points. Use this insight to tailor your services.
  • Feedback loop: establish a robust mechanism to gather and act on customer feedback. Real-time adjustments? Yes, please!

 

 Strategy 2: product development that puts consumers first

  • Regular reviews: continuously assess if your products are meeting consumer needs. Outdated offerings won’t cut it!
  • Innovative features: consider integrating features that enhance user satisfaction and safety. Think about long-term benefits, not just short-term gains.

 

Strategy 3: communication is key

  • Crystal clear communication: ensure all your consumer-facing communications are clear, concise, and jargon-free. If a 12 year old can’t understand it, rewrite it!
  • Proactive outreach: don’t wait for consumers to reach out with problems. Be proactive in your communications, especially regarding changes that affect them.

 

Digging deeper: tactical execution of Consumer Duty

 

Tactic 1: training and culture

  • Empower your team: regular training sessions on the importance of Consumer Duty and how to implement it should be your new norm.
  • Culture of responsibility: foster a company culture that celebrates transparency and consumer satisfaction.

 

Tactic 2: compliance as a service

  • Beyond the minimum: treat compliance as an opportunity to excel, not just a box to tick.
  • Regular audits: implement more frequent internal audits to ensure every department complies with Consumer Duty.

 

Tactic 3: tech at the forefront

  • Automation tools: use technology to streamline compliance processes and reduce human error.
  • Consumer apps: develop consumer apps that not only meet their needs but also keep them informed about their rights and your responsibilities.

 

Consumer Duty FAQs: all you need to know

 

  • What are the penalties for non-compliance under FCA Consumer Duty?

Failure to comply can lead to hefty fines, reputational damage, and even legal action. It’s not just about the money; it’s about trust and longevity in the market.

 

  • How often should we review our compliance with Consumer Duty?

It’s wise to conduct a comprehensive review at least bi-annually. However, constant monitoring for significant issues is recommended.

 

  • Can small firms meet these new requirements as easily as large firms?

Absolutely! While resources may differ, small firms can be more agile and responsive, often leading the way in innovative consumer-focused strategies.

 

Consumer Duty: ready, set, excel!

Breaking the mould under the new FCA Consumer Duty isn’t just about survival; it’s about thriving. By embracing these advanced tips and integrating them into your business model, you can ensure not only compliance but also a competitive edge in the market. Remember, it’s a journey — one that involves continuous improvement and adaptation. So, keep your eyes on the prize and your operations in line, and you’ll not only meet the FCA’s expectations but exceed them. Happy strategising!

 

To help you with Consumer Duty – Contact Us today.

 

LS Consultancy is a Affiliate Member of the Consumer Duty Alliance, which is an independent, ‘not-for-profit’ professional body. It aims to support the personal finance sector in the adoption and implementation of the FCA’s Consumer Duty requirements through the alliance of like-minded individuals and firms.

 

Call us on +44 (0) 20 8087 2377  or email us.

 

If you want to get the right advice, quickly, with clear and totally transparent, unshackling yourself from the confines of an antiquated compliance support service, then contact us.

 

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