FCA: ‘Trust and loyalty aren’t difficult to get but they can be eroded’

Speaking at City & Financial Global’s Consumer Protection in Financial Services Summit today (September 29), Mills began by giving the example of opening his own bank account at the age of six or seven, explaining that while he has opened accounts with other banks, he has remained loyal to that unnamed bank ever since. 

The FCA’s financial lives survey found that just over a third of consumers (36 per cent) saw financial firms as honest and transparent in their dealings with them. 

“Consumers should come away satisfied and confident with their needs met and an understanding of the product or service they've got,” Mills said. 

“Trust and loyalty aren't so difficult to get, but they can be eroded. There's work to do, and the new consumer duty should help build a trusted financial services industry, which achieves good outcomes for people.

“Ultimately, confident consumers and businesses contribute to productivity and growth in the UK economy.”

Mills argued this is “essential now more than ever” because families up and down the country are struggling with their finances and thinking about how best to manage them. 

 We really saw that growing trust in financial services and I hope the duty will help build on that. Sheldon Mills, FCA

“We want to take the spirit and intention of the new consumer duty towards this cost of living crisis,” he said. 

“We want the financial services industry to harness data and digital technology to support those families as we go through this macro economic shift.”

Fair value

Discussing the FCA’s expectation of firms when it comes to the consumer duty, Mills said its at the “heart of our work” to make financial services work well for all consumers in the country. 

“I'm in no doubt that the duty is a significant shift in what we expected,” he said. 

“It means making lasting changes to culture and behaviour to consistently deliver good outcomes and put consumers in a position where they can make informed decisions."

The new consumer duty is an absolute opportunity to start from the ground up with that data collection and really embed that data strategy in the way that we operate. Sheldon Mills, FCA

The FCA’s new duty will require all firms to put their customers' needs first and Mills explained that trust and confidence in financial services is key to achieving good outcomes for consumers. 

“I've worked closely with many firms during the pandemic and I really saw the industry pull together to support consumers, businesses and the wider economy. 

“We really saw that trust growing that trust in financial services and I hope the duty will help build on that.”

Data strategy

The FCA regularly requires firms to supply data and information around the way the firm operates.

Commenting on this data, Mills said: “We do a lot with some of it and not enough with all of it. We have a data strategy that we've published in order to really improve the way we use data.

“The new consumer duty is an absolute opportunity to start from the ground up with that data collection and really embed that data strategy in the way that we operate so we hope to be using that.”

Mills explained that in the same manner that it requires firms to operate better, the FCA also hopes to become more operationally efficient and service oriented.

One of the current challenges the FCA is facing is around authorisations, with many firms concerned about some of the wait times and delays.

“We've just hired 95 new colleagues in our authorisation team and new automation technology tools,” he said.

“We've also increased rigour in our decision making because you still have to have an effective and strong gateway to make sure the bad actors don’t come through.”

sonia.rach@ft.com