The findings from the FCA’s Financial Lives survey published on 17th May serve as a timely reminder of the hardships consumers face in the current economic climate. As a firm, we help our clients understand and address these growing challenges, particularly considering the forthcoming introduction of Consumer Duty.
The research conducted by the FCA offers a comprehensive look at the financial health of respondents eight to nine months after the initial Financial Lives 2022 survey. A crucial takeaway from the study is the rising burden of bills and loan repayments on consumers. The FCA found that the number of people struggling to meet bills and credit repayments has significantly increased by 3.1m since May 2022, reaching 10.9m, compared to 7.8m the previous year.
Additionally, the number of adults who missed bills or loan payments in at least three of the past six months has risen by 1.4 million, from 4.2 million to 5.6 million over the same period. This emphasises the need for firms to not only understand the pressure that their consumers are under but also proactively work with them to manage their financial situations.
Consumer Duty with the first deadline coming into force on the 31st July 2023 is a key element of the FCA’s strategy to ensure that firms consistently consider and prioritise the interests of their retail clients and customers. As such, this principle will act as a significant driving force behind the FCA’s consumer protection work.
Under the Consumer Duty, firms will be required to ensure that their services and products are not only fair but also transparent. They must act in the best interest of consumers and provide appropriate levels of care. Essentially, the introduction of Consumer Duty compels firms to adopt a more consumer-focused approach, elevating the standards of conduct expected in the financial sector.
In the context of the survey findings, the Duty is expected to play a pivotal role in alleviating the rising stress and anxiety linked to the increasing cost of living. Firms, under this Duty, are mandated to provide support for consumers, especially those struggling with their financial obligations. They are expected to work hand-in-hand with their customers to find viable solutions for managing payments, including offering forbearance where necessary.
The Duty also promotes increased engagement and communication between firms and their customers. By encouraging open dialogue, firms can better understand their customers’ needs and address any financial difficulties they might be facing more effectively. This leads to better consumer outcomes and increased trust in the financial sector.
As leaders in compliance, we recognise the significance of Consumer Duty in shaping a fairer and more transparent financial market. Our role is to support our clients in implementing these regulatory changes, embedding the principles of the Consumer Duty into their business practices, and ultimately elevating their customer service standards.
Therefore, as we anticipate the official implementation of the Consumer Duty, we encourage firms to align their operational and business strategies with these expectations. By doing so, they are not only maintaining regulatory compliance but are also championing the well-being of their customers, a value that resonates greatly in the current socio-economic environment.
How can Complyport help?
With the first Consumer Duty deadline fast approaching, it is imperative that firms to which the Duty applies are prepared in order to mitigate fines and reputational damage.
Discover the comprehensive range of services provided by Complyport, designed to guide and support firms throughout their Consumer Duty Implementation journey.
Our offerings include:
- Online Implementation Readiness Assessment:
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- Utilise our user-friendly online questionnaires to demonstrate consideration for Consumer Duty and identify gaps and areas for improvement. This assessment serves as a foundation for developing an effective implementation plan.
- Consumer Duty Service package:
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- Benefit from a holistic package that encompasses various elements, such as:
- Diagnostic assessment to determine the applicability of Consumer Duty.
- Report Templates to streamline your documentation process.
- Working Papers and relevant rules to ensure compliance.
- Choose from our suite of meticulously designed policy templates*, including:
- Product Assessment Policy
- Consumer Duty Working Papers (client version)
- Consumer Duty Monitoring (client version)
- Fair Value Assessment Policy
- Consumer Duty Diagnostic Assessment
- Consumer Duty Annual Report
- Benefit from a holistic package that encompasses various elements, such as:
*Please note that policy templates can be customised for an additional fee.
- Consultancy Services:
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- Access contracted and ad hoc consultancy support, both pre and post-implementation deadline. Our experts will assist you with regulation interpretation and address any personal queries, providing you with peace of mind throughout the process.
Partner with Complyport to navigate the complexities of Consumer Duty Implementation seamlessly. Our tailored solutions and expert guidance will empower your firm to meet regulatory requirements effectively. Contact Jan Hagen via email at jan.hagen@complyport.co.uk to book a free consultation.
