Speaking at the PIMFA Consumer Duty conference today, Therese Chambers, director of consumer investments at the regulator said the rules were to be taken seriously.
“The Consumer Duty is a watershed moment and a key priority for the FCA, we are looking for a fundamental change in firms’ approaches to ensure the best client outcomes, not just technical compliance,” Chambers said.
She also stated that the rules were not a “re-expression of Treating Customers Fairly” as it would create a cultural change across regulated firms.
Chambers said: “Consumer Duty is a substantial uplift in consumer standards and rules from July 2023. It will require firms to document and evidence consumer outcomes, which the FCA hopes will help firms review and make further improvements for their clients in the future.”
Chambers said the regulator was looking for firms to be more diligent in gathering documentation for consumers.
She also warned that some firms, particularly larger ones, were “overly simplistic and optimistic” about their ability to comply with the rules by the deadline.
Chambers urged firms to prioritise ways to reduce risk and focus on closing the gaps which prevented them from reaching good consumer outcomes.
She said firms also needed to look at their data strategies and warned that some had not paid enough attention to the impact of third party suppliers on consumer outcomes.
Chambers said: “The Consumer Duty is central to the FCA’s own innovation and part of their strategy to rebuild consumer trust and confidence over the next three years.
“We regard the Consumer Duty as the tool that will drive that change.”
