According to research from Moneyhub, which surveyed 150 senior decision-makers such as chief executives, directors and managing directors at such firms, found only 22 per cent thought their companies were currently compliant with new regulation.
Consumer Duty is a set of rules and guidelines outlined by the FCA that “set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first”. It covers the product design, distribution, service and communication, reporting, data collection and much more.
The first implementation deadline has been shifted from April next year to July, but the FCA has said that it wants implementation plans by October.
Over three quarters, 79 per cent said that Consumer Duty would have a significant impact on their way of doing business, with Moneyhub noting that the regulations will affect a firm’s book of business rather than new business and could prompt a reevaluation of products that current customers are on.
The company added that there was a risk that many would not meet the new deadline of July if firms were struggling with creating implementation plans and legacy systems used by businesses would make the exercise “difficult”.
Consumer Duty will test firms’ ‘reality’
Samantha Seaton, CEO of Moneyhub, said: “While many firms believe they are already customer-centric, Consumer Duty will test the reality of this. The new regulation demands a level of customer knowledge that most firms are yet to appreciate. The amount of data needed on the customer to comply with Consumer Duty requires a new level of operation for most businesses.
“There is an expectation that boards already have a plan in place by October. However, we can see that this is unlikely to be the case.”
She continued: “By not preparing early for the incoming regulation, firms not only risk being non-compliant, but also missing out on the opportunity that Consumer Duty presents.
“Taking a customer-centric approach rather than a product-led mode of operation is now imperative for all businesses. Moneyhub’s platform can provide this knowledge and the ongoing monitoring to ensure appropriate and suitable products now as well as throughout the entire lifecycle of that product.”
