John Wilson, Managing Director UK and Ireland at Avaloq, comments on the FCA requirement for financial institutions to have agreed their Consumer Duty implementation plans by Monday 31 October:
The FCA’s Consumer Duty will usher in a major shift in the financial services sector, as requirements on oversight and transparency become more clearly defined. There will be little room for passive client relations from next July, but the more imminent deadline for financial institutions to have their implementation plans in place this month may have been missed.
The FCA expects financial institutions to have clear implementation plans in place by the end of October, though they do not necessarily need to have fully scoped out the work that must take place in order to embed the Duty for the July 2023 deadline. Regardless, it is important that financial organizations urgently consider, if they haven’t already, how technology and platforms can ease the administrative burden of complying with this new regulation.
The Consumer Duty centres on clear and timely communication, client support and personalized service based on the needs of each client segment, as well as fair value. It requires financial institutions to identify where, and why, a client may not be receiving a good, or desired, service, and proactively address any risks or issues identified during this process.
Beyond compliance, the Duty is an opportunity for financial institutions to truly demonstrate the value they provide, improve client engagement and loyalty through enhanced communication, more tailored investment advice and targeted support. For financial institutions that have not nailed down their implementation plans, as well as for those that have, now is the time to evaluate what they need not just to comply with the Consumer Duty, but to take advantages of the opportunities it presents.
