For those that have been able to enjoy a break over the festive period, welcome back. If your dinner table discussions were like mine and involved catching-up with friends and various branches of the family tree, it no doubt involved the inevitable question of “how’s work going?”.
This momentary pause from eating chocolates and playing charades, guessing which film an errant five year-old nephew is trying to act out, briefly pulled back memories of what remains at the desk…
It has also allowed me to become very adept at explaining the new Consumer Duty to all age ranges and it seems that everyone is welcoming its introduction. Does that mean I won’t have to wait on the phone as long? Will there be more bank branches? Does that mean that my agreement will be easier to read? Will I get more interest on my account?
While trying to temper enthusiasm, my micro survey over the dinner table shows that there is a desire from customers to see change, which is, of course, one of the FCA’s principal drivers, but the delivery needs to be managed.
On returning to work and surveying the desk, there is much work to do.
After the elation of delivering implementation plans to boards in October, it’s now time to regalvanise the team and execute on those commitments. But, what should businesses be doing now? Here are five key areas to focus on in delivering the Consumer Duty.
1. Complete your gap analysis
While there’s no particular order to the other items on this list, completing a gap analysis has to be the number one priority.
This will map out areas to focus on and will inform resource and timing. This gap analysis should be the foundation of everything that is required to be done and until complete, it’s impossible to know the shape or size of the task.
Getting this task right the first time will save a lot of wasted effort and avoids duplication and rework.
Shoosmiths has developed a playbook to deliver or compliment gap analysis, which can be quickly deployed into the business.
2. Review customer journeys
There is an expectation that all firms will be able to assess customer journeys and identify where there may be issues and proactively address these.
This is a difficult and time consuming task, but is fundamental to the embedding and on-going support of the Consumer Duty. It would be impossible to appropriately monitor customer outcomes without having good insight as to a customer’s experience with the firm, at different stages of their journey.
This may require new tools or software to be deployed to enable firms to really understand interactions with customers, or even additional resource to effectively manage and report on the findings.
Starting this process now will increase the opportunity to refine methodologies and approach and help to deepen the understanding of the customer’s journey.
At Shoosmiths, we have been helping firms to develop their policies and methodology for assessing customer journeys and enhance these in line with the requirements of Consumer Duty.
3. Review customer communications
Identifying and reviewing customer facing communications will be a key task. The review should be comprehensive and should include online information, booklets and guides, FAQs, terms, call scripts and post-sale communications.
There are some key questions you could consider in assessing communications:
- Do you have a centralised library of your customer communications?
- Are customer communications consistent and easy for customers to understand?
- How are customer communications tested and monitored?
- Do you have a policy for the development and amendment of customer communications?
4. Governance
Ensuring good engagement with the board and SMFs is critical to the successful delivery of the Consumer Duty and evidencing this to the FCA. Remember, the FCA expect a cultural change.
It is important to ensure that the governance pathways are well defined and that relevant decisions are presented to the correct committees and audience at the right time.
If you have nominated a Consumer Duty Champion, are they now clear on their remit and role? Do you have an updated scheduled for your board and is there an agreed schedule of reporting?
5. Review your MI and data
There is often a depth of data within businesses, employed for different purposes. It is fundamentally important to review and assess this to understand the source(s) of the data and its veracity.
Some of the key things you might think about could include:
- Do recipients of the data understand how it is constructed and what it is telling them?
- Can the data be accurately recalled and relied upon to evidence decisions and the successful delivery of the customer outcomes?
- Do you have data sets missing from the business that are required to be developed?
In the FCA’s non-handbook guidance, there is a useful, non-exhaustive list of different data sets that firms may wish to consider developing.
Include a review of the data sets as part of your gap analysis and build this into your implementation plan. Socialising and discussing this data with SMFs and other senior managers ahead of the implementation date will give your business confidence in delivering customer outcomes and evidencing these to the FCA.
As at the 1st January there were 211 days until 31st July, of which 145 are working days. Shoosmiths is working closely with firms on the delivery of implementation plans and the completion of their gap analysis. Through our Financial Services Compliance products and services, we can offer advice and also short or long-term resource to support the successful delivery of the Consumer Duty.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.