FCA Consumer Duty Summary
The Financial Conduct Authority (FCA) has started to introduce a series of regulations as part of a new consumer duty. This new consumer duty aims to improve how firms serve consumers fundamentally. It will set higher and clearer consumer protection standards across financial services, requiring firms to put their customer’s needs first. Consumers will need to be presented with accurate communications that they can understand, products and services that meet their needs, and the required level of customer support to make the best possible decisions. Some of the key FCA Consumer Duty regulations will require firms to:
- End rip-off charges and fees.
- Make it as easy to switch or cancel products as it was to take them out in the first place.
- Provide helpful and accessible customer support.
- Provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than burying key information in lengthy terms and conditions that few have the time to read.
- Provide products and services that are right for their customers.
- Focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction.
Why Was The FCA Consumer Duty Introduced?
One of the key aims of the FCA Consumer Duty regulations is to drive a healthy and successful financial services system and allow consumers the opportunity to make informed choices that are subject to change if necessary. The FCA really want to see the consumer and their needs being put at the forefront of the strategy for financial organisations. The goal is to create healthy competition between different financial organisations with putting consumer needs first. This will then create a healthier system that can generate thriving firms, as well as consumers who are well-informed on their financial decisions and the implications of these decisions.
Who Is Affected By The FCA Consumer Duty?
These new regulations will come into effect across the financial industry, some of the stakeholders who are affected by this include:
- Regulated firms, including those in the e‑money and payments sector.
- Consumer organisations and individual consumers.
- Industry groups/trade bodies.
- Policymakers and regulatory bodies.
- Industry experts and commentators.
- Academics and think tanks.
What Does It Mean For Your Financial Communications?
As a financial firm, your customer communications are so important. These communications need to be as clear and concise as possible. Often communications from financial firms can be presented in a misleading way that is difficult to understand. You will need to find ways to present communications that are easy to understand and are adapted to the needs of each individual consumer. For example, when your consumers have different needs, you will need to work to meet these needs. You will be expected to provide excellent customer service to ensure that all of your customer’s questions are answered in a timely manner.
How Long Will You Have To Implement A Plan?
The FCA Consumer Duty will fully come into force on a phased basis:
- For new and existing products or services that are open to sale or renewal, the rules come into force on 31 July 2023.
- For closed products or services, the rules come into force on 31 July 2024.
How Sefas Can Help
SEFAS offers an expert CCM solution that is built specifically for the needs of companies in the financial industry among many others. As a business in the financial industry, it is important that you are always able to communicate with your customers in a simple and effective manner. You have to ensure that you are keeping up with and implementing any new regulations such as the FCAs Consumer Duty. Our software enables you to always be on top of all new regulations and laws and will audit all of your customer communications to ensure that they fit with these regulations. Communicating to customers across a variety of different channels with ease is what we can offer your business. To find out more check out our HC Suite, and get in contact today.