Long Read  

Embracing the spirit and opportunities of the new consumer duty regulation

Complaint handling is core to the consumer duty, so prioritise how your approach can highlight foreseeable harms and resolve complaints quickly and fairly.

Companies must identify gaps and consider the impact for all customers, paying specific attention to vulnerable customers. 

Finally, continuously monitor customer experience. This will involve both subjective assessment, such as customer feedback, and objective assessment, such as the number and nature of complaints. Data and analytics will be crucial to providing insight and early warning of any emerging risks.  

Embrace the shift 

Getting the whole organisation on board will give you confidence that your people will always do the right thing.

This will be a different challenge in different companies and sectors, and the FCA is clear that the work should be proportionate.

But for most it will be important to consider how to define a consumer-centric culture and how that breaks down into measurable behaviours across each of the four outcomes, then to identify and embed behavioural change levers into your consumer duty implementation programme.

These include governance, roles and responsibilities, learning, performance management, leadership, and habit formation. In simple terms, it is making sure that it is real and that it sticks. 

And it is important to recognise that culture does not come with a defined start or end date. You need to continuously nurture culture using levers like the ones above.  

Use the regulator’s insight as a guide 

The FCA has already done a lot of the thinking around how to put customers first, highlighting that mapping where and how the four outcomes intersect in your organisation gives you a framework for redesigning strategy, governance, and the organisation more broadly. 

You can also look to work already done, such as that with general insurance, to understand how the regulator views outcomes like ‘fair value’. 

Consumer duty can create genuine customer-centricity 

Proportionality is imperative and there is an understanding that it will take time for the duty to fully embed. Many companies will be looking towards a minimum viable product for April 2023, with an aspiration to move to best practice over time. 

Some companies may feel they have a head start in terms of culture but need to avoid complacency.

Others can use the new duty as an accelerator for change.

For all, it is an opportunity to drive genuine customer-centricity and improve the trust and confidence of customers and the wider public. 

The regulation presents an opportunity for organisations to reframe their role in their customers’ lives and work collectively to reposition the industry as a force for good.  

Caroline Wayman, former chief executive of Fos, is a risk and regulation expert, while Gabriele Birnberg is FS culture and people transformation expert at PA Consulting