Speaking at an event hosted by Deloitte today, Sheldon Mills, executive director, consumers and competition at the regulator, said many firms had made “excellent progress” so far.
He said these firms were on course to meet the deadline and while the final details were still being arranged, they were in place to be compliant.
However, he warned that a minority of firms saw the task as “too big” and have “adopted an avoidance tactic in the hope that it will go away”.
Mills said: “On behalf of your industry peers who have made the effort, we can confirm that the Consumer Duty will not go away. Their hard work has not been wasted. And you still have time to deliver. But you must act now. The deadline of 31 July will not be moved.”
Resistance is understood
Mills said he understood why there had been resistance, but the regulator would be on hand to help.
He admitted that the FCA had “not been great” at explaining what the benefit for firms would be and an industry leader told him that on the face it was a “pain”. However, it later proved to be “a useful exercise”.
Mills said of this firm: “They were uncovering customers they had not engaged with for some time. They were hammering out plans for new products and services ahead of schedule. They started looking at potential problems far earlier – and importantly, identifying new opportunities earlier too.
“In all, it forced them to think differently. And what sparks innovation if not thinking differently? The benefits to industry and organisations are that the exercise itself will refine systems and ideas.”
Mills said being upfront should lead to fewer complaints which would be followed by fewer reactive rules.
He added: “It will boost competition, as firms strive to offer the best in competing for clients. But it should also provide an opportunity to inspire customer loyalty.
“Ultimately, it will also increase trust in financial services, levelling up standards so that those who are striving hard are not taken down by industry stragglers.”
The Consumer Duty is achievable
Mills said some people had questioned whether the Consumer Duty “is really deliverable”. He said based on the evidence provided by firms so far, the answer was “yes”.
In the five months leading up to the rules coming in, the FCA will send out industry-specific letters to support the guidelines firms already have and 600 smaller firms will be surveyed regarding how prepared they feel about their implementation plans.
Mills also advised that the Duty was not retrospective, so firms will not be taken to the Financial Ombudsman Service over past actions.
