FCA issues findings from Consumer Duty survey
What has happened?
In June 2023, the FCA commissioned an anonymous survey of 1,230 firms in some of the sectors in scope of the Consumer Duty Regulation to help it understand how prepared firms were to meet the implementation deadline of 31 July 2023, and also how the FCA could support firms to embed the Duty effectively.
The fieldwork for the survey ran between March and early May 2023, and so the results give a snapshot of firms’ preparedness three months before the deadline.
What are the key points?
The survey was focused on sectors and sub-sectors where it appeared that firms may have been less engaged and prepared. This includes sectors where firms are smaller or have less regular contact with the FCA, or where financial services is not their primary business.
The FCA received the interim results in early May and has since issued further targeted communications to firms in sectors where understanding and preparedness was lower. This survey is the first in a series of quantitative and qualitative work to be conducted with firms this year.
Most firms surveyed believed they were on course to implement the Duty by the 31 July deadline. 64% said they would be fully compliant by the deadline and a further 23% said they would comply with most requirements by the deadline but would still have some work to do. 7% said they would still have significant work to do after the deadline or had not started work on the Consumer Duty Regulation.
Two groups of firms – retail finance providers and debt advice firms – scored consistently lower than others on engagement, understanding, and implementation progress. The FCA is issuing further direct communications to these firms and is working with industry bodies to amplify messages.
The two areas that firms said they would like more information on were outcomes monitoring and the price and value outcome.
The FCA remains concerned that a small minority of firms have not prioritised the Consumer Duty Regulation sufficiently or made use of the substantial FCA support available. Firms in sectors highlighted by this survey as not giving the Duty adequate focus can expect more scrutiny in the coming months.
The FCA considers that firms that have made good progress but are struggling to complete all the work required before the deadline need to make maximum use of the time available, prioritising action that improves consumer outcomes and reduces risks of harm. Oversight of this prioritisation is essential, and boards and management bodies need to ensure they have identified any potential gaps or weaknesses in their implementation and any action needed to remedy this.
Firms that have not been taking the Duty seriously and are a long way from meeting its requirements need to make strenuous efforts in the next month to accelerate their implementation work, prioritising the work that is likely to have the greatest impact on consumer outcomes.
How can we help you?
Thistle Initiatives has supported firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, its team of specialists can serve as your right hand in meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.
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