July marks the second anniversary of the consumer obligation, the FCA regulation was aimed at determining higher standards for financial service providers and in turn better results for customers.
Morgan Ash Managing Director Andrew went Believes that some companies have the opportunity two years later to stay closer to customers and have made good progress in better understanding their needs and coordinating service to deliver better results.
But he adds that there are still companies that are behind the curve, whether it is about complying with the duty and getting principles -based regulations, or the broader expectation to embed these principles in corporate culture, administration and leadership.
“Self -compliance remains a major problem because companies overlook the change of step that is needed to meet the expectations of the FCA.
According to Gething, one of the biggest improvement areas is a customer vulnerability. “In its recent multifirm vulnerability evaluation, the FCA has established that companies are still not able to check whether action is taking action for results for vulnerable customers. This is not surprising; identifying vulnerable customers is long considered the most difficult aspect of consumer obligation.
“Although we are all vulnerable at some point in our lives, many companies still report very little, or zero, vulnerable customers. This is simply not realistic -especially when the FCA survey of FCA from the Financial Lives research has shown that 49% of British adults have one or more characteristic of vulnerability.”
GDING argues that part of the problem is the reactive approach of many companies – waiting for consumers to tell them about their vulnerabilities or to concentrate on just a subset of their customer base – or one channel, such as claims or complaints.
“Although this is a good place to start with, it does not give companies something like the full picture. To achieve that true share, the FCA has repeatedly said that companies have to” actively deal with consumers “; this still appears to be a real stumbling block for many.”
The exeter head of the Compliance Toni Hatton insisted that consumer obligation was never about adding bureaucracy. It was introduced to ensure that customers get the results they deserve.
“Since then we have seen real improvements in the entire industry. More providers offer detailed CPD training on vulnerability and companies make better use of customer data to log conversations, to flag risks and to follow more proactive. There is a much clearer commitment to identifying vulnerable customers and measuring the real value.”
GDING argues that technology must be the priority for financial service providers in year three. “It not only stimulates efficiency, it entails consistency, scale and cost savings that cannot be achieved by a manual approach or training.”
Future for consumer obligation
Consumer Duty recently found his future in the spotlight. As Gingers notes: “The recent speech by the Chancellor in the industry industry removed her comments from the context – and think it is all over for consumer obligation.
He added: “The shift to principles -based regulations and a focus on results is an important step. It also provides consumer protection and also offers flexibility for growth. It is a forward step, but it is almost as if companies want to go back to the regulations for the old regulations.”
Hatton takes a similar line: “The decision of the Chancellor to revise the duty has asked questions about its future. And although it is correct to think about how regulations work in practice, we must ensure that we do not lose what has been won. Wearing or deleting the duty that would now risk the meaningful progress – but for the confidence.
She added: “There is always room to improve how regulations are applied. In this urge for growth, the answer is not always back -flowned standards, but to building and improving what already works.”