Sheldon Mills – the FCA’s Executive Director, Consumers and Competition – gave a speech in which he focused on some key Consumer Duty observations, seeing as the main deadline is 31 July.
The points he made were useful, of course, but what really struck me was his invocation of Jules Vernes’ fictional account of circumnavigation in Around the World in 80 Days, and the real-life women who bettered that feat: Nellie Bly and Elizabeth Bisland. The admonition that Mills made is best summarized as: since these young people accomplished an amazing feat in less than 80 days, UK financial services firms in scope of the Consumer Duty can certainly comply within 80 days as well.
Some key quotes from Mr. Mills’ speech:
Those firms who do the right thing and show leadership should welcome action to tackle poor practice by competitors who drive down standards.
We will all become ever more outcomes-and data-driven – which means focusing on results over processes - ever more attuned to the needs of consumers.
The Consumer Duty is an opportunity for manufacturers and distributors to really understand the impact that different commission models have on the value that consumers receive, and we will be taking a close interest in this aspect of the Duty across sectors.
If you look at our recent Consumer Duty ‘Dear CEO’ letters, you will see that fees and charges are referenced across multiple sectors.
The Duty is outcomes-based, and a key part of the Duty is that firms understand and evidence the outcomes their customers are receiving.
For those who are not up to speed, don’t delay. Don’t panic but do act! You still have time, but only just.
Unlike the young women in the speech, positive PR is not the driving force for firms to comply with the Consumer Duty. In this context, regulatory necessity is the main driving force but, like vision, regulatory necessity can be quite a powerful driving force. Like regulatory obligations, other driving forces could be:
the desire not to become an FCA enforcement test case, or
not to erode earned brand value by achieving sub-par outcomes for retail customers.
In their day, Bisland and Bly employed ocean liners and trains as essential tools. In May 2023, firms can use consultants (says the consultant). External consultants / external advisors can be the steam engines that assist in getting you to your destination. While that may not be chugging around the globe, compliance with a set of new regulatory obligations and thereby obtaining deeper client insights, higher retention rates and demonstrably beneficial relationships is certainly a worthy achievement.
Or as generative AI puts it: Embarking on the journey of compliance with new regulatory obligations may not involve circumnavigating the globe, but it can certainly lead to charting a course towards deeper client insights, higher retention rates, and demonstrably beneficial relationships – a worthy destination for any business navigator.
