Tip One: Don't assume you currently do enough
This is more than TCF because TCF does not require that firms factor in behavioural biases at every aspect of the customer journey – like you need with the Consumer Duty.
Moreover, under the Consumer Duty, you must make increased and better use of data when monitoring and when sharing data.
Compliance with PROD is not enough.
Firms also have to watch the simplicity, comprehensibility and layout of communications.
Tip Two: Firms need independent input and assurance
There are two types of gap analyses under this topic. One is the regulatory gap analysis, which compares TCF obligations (pre) to Consumer Duty obligations (post). The other is your firm’s business process gap analysis. Having a third party provide input and assurance along these two vectors will help determine the regulatory uplift and the business process uplift needed for substantial compliance with the Consumer Duty obligations.
Tip Three: Prioritize effectively
(1) Prioritize the areas that have the greatest potential for poor customer outcomes.
(2) Prioritize the areas where the firm is likely to be furthest away from compliance.
Tip Four: The Consumer Duty must be embedded in your firm's culture at all levels and at each step of the customer life cycle
Take tangible action and evidence:
(1) Role specific training
(2) How you embed the Consumer Duty in:
a. Setting strategy
b. Governance
c. Decision making
d. When reviewing rewards, incentives and performance management
e. The firm’s SM&CR approach. Each area of responsibility must be covered off.
Tip Five: Monitoring
Under the Consumer Duty you need a rigorous approach to monitoring. This really shines a light on data collection, data cleansing and data analysis.
