In the new Consumer Duty, the FCA has indicated that firms can ‘expect at every stage of the regulatory lifecycle to be asked to demonstrate how their business models, the actions they have taken, and their culture are focused on good customer outcomes.’
The regulator also discusses the MI and data types that companies need to track. Firms will struggle to meet these robust expectations using manual methods or in-house tools.
— JOHN LIVER, STRATEGIC ADVISOR TO KORE
FORMER CO-CHAIR OF THE EY GLOBAL REGULATORY NETWORK
Key takeaways for the final consumer duty regulations
The basics of the Consumer Duty
The new Consumer Principle says a firm “must act to deliver good outcomes for retail customers.” This is now Principle 12, and supersedes Principles 6 and 7 for retail customers. The FCA says it “is a clear break from existing terminology.”
The new Cross‐cutting Rules must be implemented both proactively and reactively. Under the rules, firms must:
act in good faith towards retail customers
avoid causing foreseeable harm to retail customers
enable and support retail customers to pursue their financial objectives
The FCA has published detailed guidance to help firms implement the “Four Outcomes”.
The guidance targets what the FCA says are key elements of the firm-consumer relationship:
Products and services
Price and value