Speaking at the Pimfa Compliance Conference today (September 28), Worksmart business development manager Emma Howell said it was important to understand that the point of the consumer duty is the outcome from it.
“It's scary that we have had a significant number of firms say ‘well this is just TCF’ but I'd say it's an extra mile on TCF.
“TCF was about having that framework in place, and I think most firms kind of nailed that. But this isn't about that.
“This isn't about the framework. This is about the outcomes. If firms can focus on that, there's a win there.”
She explained that it was important to see the consumer duty as an opportunity rather than a tick box exercise.
“We’ve been through SMCR with hundreds of clients and that was seen as a huge pace of change, and it was, but not all firms took the opportunity to really get value out of that process.
“With consumer duty, I think there is an opportunity to look at it with a broad brush and say, well, if you look at those four outcomes, let's work backwards from that and ask some really deep reaching questions about the way that we do things now.”
Howell argued that if firms do that for the four consumer duty outcomes and drill down, there will likely be another 20 workstreams under that.
“It's about asking the tough questions about what we do now, what does that process look like, how arduous is that, what's that costing us [and so on].”
‘Joining the dots is the biggest challenge’
Meanwhile, Worksmart head of client engagement Nic Dent, argued that accountability for firms was a big part of consumer duty and perhaps one of the bigger challenges.
In the context of systems and controls challenges, Dent said he often hears firms state they have their governance nailed, do the right thing and have a culture that works.
“Great, but how do you evidence that?,” he said. “ Have you got that granular detail? Have you got that point in time information that you could go back to historically and say, that's what my business looked like on that day and that's why we made that decision.
“And six months later, there's the outcome that that decision had, but that's a bit of a challenge.
“Joining the dots for governance and accountability, and making sure you've got that evidential record for me is actually one of the biggest challenges for firms I think from a systems control.”
Dent urged those at the conference to review their systems and controls, processes and procedures, as he argued there is probably better technology out there that can help and “it's worth kicking the tires on it” because efficiency wise and cost wise it's probably cheaper and more straightforward.
“You get that audit history, that evidential record just as a byproduct of managing things in a smart way so it doesn't become that real challenge it can be if you're reliant on spreadsheets and paper based processes,” he said.
Howell agreed as she said: “I strongly suspect that at least some of you in the room will have fallen foul of the IT roadmap internally as well. The larger the firm you are the longer you wait for stuff and I think that's pretty widely accepted.”
She added: “Don't fix what's not broken. Review processes, but don't try and reinvent the wheel to try and join them up. We see that all the time.”
sonia.rach@ft.com
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