One of the examples of poor practice in the final guidance is precisely the scenario of delays caused by an investment platform dragging its heels, following an instruction to switch a client’s assets, on the grounds that there is no commercial benefit in the customer making this switch.
The sort of evidence of good consumer outcomes required to meet the duty includes root cause analysis of complaints and satisfaction surveys, and a delay of six months because you have yet to receive evidence that a letter of authority has been obtained is likely to be the reddest of red flags on your shiny new consumer duty dashboard.
The sting in the tail of the consumer duty proposals published in July is that the FCA has, for now, decided not to move forward on a private right of action in relation to the duty, but has been clear that it could revise its position in future.
If it were to conclude that a private right of action was needed, not only could a firm have the regulator on its doorstep, it could find itself in court with a customer (or a claims management company on a customer’s behalf) for delays in processing and the consequent harm.
There is, therefore, a real incentive for the industry to work together to sort this out sooner rather than later, building on the step change in technology and modernisation of processes that have been achieved over the past few years as a result in the leaps forward in fintech and working through the pandemic.
Common standards that help the industry to integrate and automate the onboarding process are urgently needed. Even if they put the manufacturers of fax machines out of business.
Alison Gay is senior public affairs consultant at the Lang Cat