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The Consumer Duty, what now?

We’ve probably all heard colleagues say the phrase “now the duty is implemented,” I’ve certainly heard this from clients on many occasions. It got me thinking about what implementation actually means and when can we consider the duty to be ‘implemented?’


What’s clear to me is that the product governance framework we create around the duty gives us an iterative process, one where we’re constantly reviewing and improving. With that in mind, I find it difficult to agree we’ve now implemented the duty. Furthermore, we’re all constantly learning, for example I’m seeing the FCA consistently refer to the duty when interacting with our clients, even where the interaction has nothing to do with their product. One example was a client who was responding to an information request in relation to a senior manager application. They were asked to provide a copy of their Fair Value Assessment despite it having no relevant information to assist the regulator with their query.

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With that in mind, we need to move to our day 2 compliance mindset and ensure we are using the product approval process as we should, capturing amendments to products or services; not just new ones. Outcomes monitoring should now be occurring, and whilst we will have proposed a decent set of MI before July to meet the requirements, we should now be refining the data to ensure we get a good picture of the outcomes customers are getting.


Embedding the duty into your business is also an important day 2 priority. To do this, firms need to understand their goal, the culture they aim for and the target operating model in respect of the duty. An acceptance that the organisation has not yet optimised their consumer duty model is necessary to successfully embark on the workstream as well as a system to measure and continually improve.


Therefore, sufficient MI reporting, systems and controls (aligned to capturing the required information), strong outcomes testing and a culture of improving are required. Continually reviewing the outcomes received by customers and taking steps to improve those outcomes will drive a level of cultural change within businesses, especially when matched with a strong accountability framework.


The consumer duty champion should also be prominent now, ensuring the duty is raised at board / senior management meetings and that customer outcomes is given as much focus as income, sales or productivity.


Clearly there is still a lot to do!


Let’s not also forget that we have the closed product reviews coming up, due by the summer. To assist we have released a template closed product review, with guidance to help guide you through the process. It can be found here: Consumer Duty Compliance Resources | RB Compliance Consultancy



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