Not Just another compliance check – Consumer Duty 2023
Higher and clearer standards of consumer protection for retail clients is the motto all retail firms should be repeating in 2023. The new shift in regulatory expectations comes at a time when now more than ever retail clients need additional support and protection.
Why this is not just another compliance check
The FCA will be looking at holistic product lifecycle data so any weakness or areas of your retail consumer cycle that has not been viewed with the four key outcomes the duty set, will be seen, and scrutinised. This regulation is not merely about ensuing you have set up strong lines of communication for your retail clients, it’s about shifting old perceptions to create new cultures that looks at current products and services in a way that offers more protection all round.
It will take firms time, money, and careful planning to ensure that post key deadlines, the Consumer Duty has created a cultural shift within internal departments, so it’s not just reflective within the data presented but also within the culture of the organisation.
Upcoming expectations 2023
By now all implementation plans should have been agreed by senior leadership and be supported by evidence to highlight that they are well thought out and have met all standards of the Duty. They will need to demonstrate a resilience in terms of longevity as well as ease of implementation. Firms who have not yet conducted internal planning and provided evidence, should act now.
The next deadline will be targeted for all manufacturers, or investment businesses that produce, issue, design, or build financial instruments. They must complete all relevant reviews by April 30, 2023, in order to comply with the four outcome rules for their current goods and services. You can read more about these here.
Meeting the new deadline will mean that rigorous compliance reviews will need to be completed and should have already been started. Firms must act swiftly to set up project teams across each business line tasked with benchmarking compliance against the new requirements and effecting a programme of change to address identified gaps.
It’s about creating an internal cultural shift
With only a few months before the next deadline, firms will need to ensure internal cultures are developed around the Duty. C-level executive support and senior management accountability will be crucial for promoting the sense of responsibility needed for this transition to be successful and meet regulation. New internal roles will need to be fostered- such as those in charge of monitoring adherence and will also need to be outlined in the senior managers’ statement of responsibilities.
Firms must also create and implement consistent internal training for their employees on the Consumer Duty. This training will be overseen, once again, by senior management, reiterating the critical requirement for their complete engagement in the process. This will not just be left to compliance teams but all teams dealing with the duty. It’s about ensuring that culture is built from the top down.
How can the contingent workforce help your transitional efforts
All firms that “have a material influence over, or determine, retail customer outcomes” will be facing a significant amount of work alongside resuming BAU activities. It is within the firms’ best interest to ensure that a robust Consumer Duty Act plan is forged and that all nuances of implementation are understood and actioned.
Many are turning to the contingent workforce, not just for the access to key skills needed to ensure transitional efforts are met but to ensure that large portions of BAU are resumed and new compliance needs are met. The contingent workforce can ensure that you reach your Consumer Duty outcomes swiftly and efficiently.
Momenta are a global contingent resource solutions firm. For over 30 years we have been partnering with companies in the financial services, legal, technology and training, and development sectors to cost effectively provide the right people, with the right skills, at exactly the right time. Momenta will provide you with added resource in several key areas, allowing you to focus on the strategic oversight of the project while we help implement your vision.
This flexibility allows you to ensure there is always the right balance for your team to deliver a far more effective solution which will help the results delivered to your client. Momenta also specialises in scaling resource requirements up and down during the lifetime of a project in order to meet all key requirements plus cost control whilst keeping delivery capacity and capability. Given the mammoth task ahead, Momenta can supply built teams to support in all aspects of the transition from:
- Finding key risks for all portfolios affected by Consumer Duty.
- Testing outcomes at the beginning of customer journeys and monitoring consumer outcomes set to full requirements of the duty.
- Cost of living expectations for clients met to meet the needs of Dear CEO letter from the FCA
- Rigorous compliance testing and monitoring.
- Implementation plans and be able to show they have scrutinised and challenged the plans to ensure they are deliverable and robust to meet the new standards.
- Complete all product and service reviews necessary to meet the four outcome rules for their existing open products and services and have shared with distributors to enable them to meet their obligations under the Consumer Duty.
- Internal training and development for internal staff to build Customer Duty Culture
- Ensuring all new products and services, and all existing products and services that stay on sale or open for renewal.
- Communication with the end customer about any new changes to the plan or policy.