However, before firms start drawing intel from products, business lines and legal entities, it will be important to take stock of the data that will appropriately evidence positive outcomes and can be subsequently used to drive even better results both operationally and externally, with improved products and services.
Detailed documentation of all decisions made (to become consumer duty compliant) together with recommended actions will leave a firm with a bank of data or, in other words management information, that will help evidence compliance to the FCA and help improve internal efficiencies.
However how the firm uses this data, for internal purposes, will determine its ability to derive value from the meaningful data collected.
In this regard it is important to remember that the FCA expects the duty to create an environment for healthy competition between firms, fostering innovation in the development of products and services that meet consumers' needs.
Businesses that look to get ahead and utilise the management data to better understand clients’ wants and needs have the opportunity to create a competitive edge by developing a suite of products and services that are not only fit for purpose but enhance the customer journey and the governance process siting behind it.
The direction and intention of UK regulators
With the introduction of consumer duty, the FCA made clear its aim to become a more assertive and data-led regulator.
The statement in itself was a marked changed in tone from the FCA and has helped establish its new approach to regulatory change, which will involve front-loading firms with pre-determined guidance to ensure that, come implementation day, there is no margin for error.
Firms should take note of the FCA’s approach to the consumer duty and its focus on consumer-led outcomes as a whole, particularly as the UK battles with a cost of living crisis.
This particular piece of regulatory change will likely set the tone, with greater scrutiny over data and general value for money in regards to products and services almost certainly coming down the tracks.
As established, the FCA is driving the industry to demonstrate its focus on good outcomes for customers, but globally other regulators are beginning to follow suit and take a similar focus.
The Central Bank for Ireland recently published a discussion paper, for instance, to review its consumer protection frameworks.
No doubt others too will begin to look at how to ensure retail financial services are made up of sustainable, resilient, well-run, consumer-focused firms, opening up a chasm of challenges and opportunities for multi-jurisdiction firms.
