TCF was (is) part of one of the Principles for Businesses: A firm must pay due regard to the interests of its customers and treat them fairly.
That’s where it stops, everything else that supports TCF, the six customer outcomes sit on a webpage, treatment of vulnerable customers is a finalised guidance paper. The only TCF publication that made it anywhere near the FCA Handbook was The Responsibilities of Providers and Distributors for the Fair Treatment of Customers which is a regulatory guide.
TCF expected us to look at the root causes of a complaint, after the complaint had been made. TCF said we should keep customers informed, customer service should be as expected.
The Consumer Duty cannot be further from this. First off it is all in the Handbook as rules, and those rules are in the most prominent, important section of the Handbook – the Principles. Just in case there is any doubt, those rules are reinforced through a conduct rule that applies to almost every individual in financial services.
We are being asked to fundamentally shift the dial from the reactive TCF world to a significantly more proactive, thoughtful Consumer Duty. Under which we need to not just inform our customers, but check they understand that information. We have to quantify and evaluate the benefits of our service proposition. Post sale processing should be just as clean and simple as making a new investment.
There is a risk that we become so focussed on metrics and data about how we are delivering on the Consumer Duty that we fall into the same trap as those implementing the old TCF guidance: we create vast dashboards and MI packs of static data that misses the point.
With the advent of the Consumer Duty FCA has proffered to remove bad firms, so that it doesn’t have to keep sticking plasters over its current regulatory regimes when bad firms find excuses to not bother going with the spirit of those regimes. In exchange FCA says it will start lifting some of the regulatory burdens. That offer from FCA is in everyone’s interests: it makes the UK more competitive, it reduces our fixed costs, and has potential to restore our freedoms in how we manage our client relationships.
Consumer Duty is nothing like TCF. Yes it’s a legal obligation, but it is also an extremely exciting business proposition. Are you ready to harness the potential?
