The Financial Conduct Authority (FCA) has highlighted its focus on ensuring good consumer outcomes in its latest Business Plan, selecting 'putting consumers' needs first' as one of its four priority areas for the upcoming year. This comes in response to the ongoing cost of living crisis, and the FCA is committing additional resources and headcount to Consumer Duty-related activities.
As the cost of living crisis continues to put pressure on households, the FCA sees the new Consumer Duty, which comes into force on 31 July 2023, as a key component in its efforts to ensure firms treat customers fairly, support those in difficulty, and provide the necessary information for consumers to make informed decisions.
To emphasize the importance of consumer needs, the FCA is investing further in its four most critical commitments for 2023/24. One of these commitments, 'putting consumers' needs first', falls under the strategic theme of 'setting and testing higher standards'. The Consumer Duty, described as a 'significant shift' in the FCA's expectations of firms, is at the forefront of this commitment.
The FCA is investing £5.3m from its annual budget to effectively embed the Consumer Duty within firms and their technology. Additional staff will be dedicated to working with firms to support consumers struggling with the rising cost of living.
The additional funding will be used for sector-specific supervisory work, targeted multi-firm work on fair value and sludge practices, and the creation of an Interventions team within Enforcement to take rapid action against immediate consumer harm. The FCA also plans to improve its data monitoring capabilities as part of its Consumer Duty data strategy.
Firms should be well under way with their preparations to meet the July 2023 deadline for the Consumer Duty. The next deadline, on 30 April 2023, requires manufacturers to complete necessary reviews for their existing open products and services, share the findings with distributors, and identify necessary changes to meet the obligations under the Consumer Duty.
What it means for you
MEMA Consultants has supported numerous firms as a trusted compliance and regulatory partner. In addition to assisting you as-and-when required, our team of specialists can provide ongoing guidance on how to meet the regulations. Our team will not only keep you up to date with new regulations on the horizon, but will also ensure you are fully compliant today.
If you want more information on the consumer duty and how it could affect your firm, reach out to MEMA for more information on how we can support you in preparing for the new changes.