In partnership with Lexology, Womble Bond Dickinson hosted a webinar to discuss the upcoming Consumer Duty.
How prepared do firms feel ahead of the 31 October?
With the deadline for firms to have prepared implementation plans and obtained Board approval for them by 31 October looming, we asked attendees how prepared they felt. 31% of respondents felt confident that they would meet the deadline with 16% worried about meeting it.
What should firms be doing?
- During the session, the team reminded delegates of the FCA's reasons for introducing the Consumer Duty, its framework and the key deadlines leading up to 31 July 2023, the implementation deadline for open (and renewal) products and services.
Lucy and Emma made suggestions as to how firms should approach the implementation plan, stressing that there is no "one-size-fits-all" solution nor a standard form plan, and the FCA has made clear the need to apply its expectations flexibly as firms' business and the drivers of harm evolve.
They also gave guidance on how to:
- understand and articulate the business of the firm in terms of products, customers, product development and distribution
- how to evidence compliance with the four Consumer Duty outcomes at each stage of each product and service
- complete a gap analysis and action plan to identify, mitigate and monitor risks
- plan for ongoing governance monitoring, and the importance of appropriate management information.
Lucy gave some examples of specific sectoral considerations for retail banking, consumer finance and insurance, looking at the products which would be likely to attract the most regulatory focus.
She highlighted business current accounts, packaged bank accounts, overdrafts and debt products, branch closures and access to cash as concerns for the retail banking sector. Consumer credit lenders and insurance firms will need to focus on the customer journey, distribution channels, and price and value, and insurers will also need to cover claims within the consumer support outcome.
Dan finished the session by discussing key HR and employment law implications. He spoke of the need for good, focussed and appropriate training for all affected staff. He went on to discuss the impact of the changes on not only senior managers, but also on the job descriptions and objectives of relevant staff and how compliance with the Duty should be built into the performance management process as well as remuneration considerations.