Sheldon Mills (Executive Director, Consumers and Competition at the FCA) has delivered a speech on what firms and customers can expect from the Consumer Duty. Mr Mills stressed that, whilst the Duty is not yet in force, the FCA expects firms to step up and provide additional support to customers who are struggling as a result of the cost of living crisis.
Highlights include:
- the Duty represents a significant shift in what FCA expects of firms – it means making lasting changes to culture and behaviour to consistently deliver good outcomes;
- the Duty will require all firms, whether manufacturers or distributors, to put their customers’ needs first;
- the FCA acknowledges that meeting the implementation deadline will not be easy but that the benefits of the new requirements are more important now than ever given the macroeconomic pressures we face;
- change will not be possible unless it is driven from the top down, with strong senior championing and oversight;
- the FCA does not expect firms to have necessarily fully scoped all the work required to embed the new requirements by the 31 October deadline. However, implementation plans should be sufficiently developed to assure boards and the FCA that the Duty will be fully implemented by July 2023;
- Consumer Duty provides an opportunity to move towards a more flexible and less prescriptive regulatory framework in the longer term. FCA envisages fewer rule changes as a result, which should lower compliance costs to firms; and
- the Duty will also provide a boost to competition in the interests of consumers and support future innovation.