Emma RadmoreThe FCA has published its latest portfolio supervision letters for retail banks and building societies. It has set 6 unsurprising priorities:
- Consumer Duty: looking at institutions to fully embed the Duty to deliver better outcomes for retail customers;
- Treatment of customers in financial difficulty: following the Duty’s requirements, give proper support to customers who are struggling;
- Access: ensure that as channels, products and services are transformed, customers are not left behind or unreasonably or unlawfully excluded from payment accounts and banking services;
- Operational resilience: ensuring that change programmes being put in place to improve efficiency, data and customer experience are not creating risks of weakened resilience or business interruption;
- Financial crime and fraud: always ensuring controls are effective and that suspicions are promptly investigated; and
- Sustainable finance: increasingly looking beyond net zero targets and climate change to consider wider environmental risks.
The FCA has, as usual, addressed its letter to the CEO and expects boards to discuss it, consider the firm’s business and review their approach to mitigating the risks the letters identify and driving improved outcomes. It also notes the importance of the Principle 11 notification system, and reminds firms this applies also to unregulated and group activities. It specifically notes that it would expect to be told of:
- any product, service or customer journey that is significantly non-compliant with the Consumer Duty;
- proposed significant business expansions or restructurings; or
- proposed new products or services or proposals to cease or significantly reduce any regulated or ancillary activity.
It notes that it will continue carefully to consider whether SMF function holders have carried out their responsibilities appropriately.