I don’t know about you, but I found the IPSOS survey results on Consumer Duty a really interesting read. Sad as that may sound, I think when you take a look at this in some detail, it really gives you a good overview of how the markets are grappling with this complex piece of regulatory change.
For those of you that might not have seen the detail, in short, the FCA commissioned IPSOS UK to undertake an anonymous survey of 1230 regulated firms. The firms were asked a series of questions about their preparedness for the incoming regime. One would hope therefore that those individuals answering the survey on behalf of their firm would have done so with a degree of accuracy bearing in mind the fact that their anonymity had been assured.
The questionnaire started with a simple one “Have you heard of Consumer Duty before today?” worryingly, only 92% of firm’s questions actually had. Now statistically you might say, well actually that’s quite a good result. However, that means that 98 firms of those polled knew nothing about it. If we extrapolate that up (if it is representative of the wider market-place) then with over 50,000 firms regulated by the FCA, they could have upwards of 3,500 firms that know nothing about a substantive regime that commence from the 31st July 2023.
However, once you start to look more closely at the results from the different sectors and supervision portfolio’s you see that in fact it is the scores pretty much across every area polled, from both Debt Advice Firms and Retail Finance Providers, that are skewing the success that the FCA have had to date in building awareness, sharing expectations and providing best practice examples across the in-coming regulation.
I think that it’s likely that there are two schools of thought here following on from the publication of the results. Firstly, good progress across many parts of the industry backed up by wider work that the FCA has undertaken. Secondly, despondency, maybe even a bit of despair that organisations that provide critical services to many, and very often to the most vulnerable within society just don’t seem to be taking this seriously, or if they are, it’s certainly not coming through in these results.
A warning shot from the FCA has already been fired to these firm types. On publishing this review, the FCA made the following comments alongside it.
“The survey was anonymous, but we are using the sectoral insights from it (and our wider supervisory intelligence) to help target our future work to supervise the Duty. Firms in sectors highlighted by this survey as not giving the Duty adequate focus can expect more scrutiny from us in the coming months.”
“Firms that have not been taking the Duty seriously and are a long way from meeting its requirements need to make strenuous efforts in the next month to accelerate their implementation work, prioritising the work that is likely to have the greatest impact on consumer outcomes.”
For those firms that did know about Consumer Duty and were working hard to embed the changes it demands, it was interesting to note the biggest response to the following question. “Which of the following aspects of Consumer Duty would you like the FCA to provide more information about?”
Respondents had a wide range of options to choose from, with the response receiving the highest scores being around “Outcomes Monitoring” including data and metrics. No surprise to see that firms have a strong eye to the future on how they will measure and be measured against the expectations of the regime.
For those firms that are currently considering what their “Reporting on Consumer Duty” will look like from 2024 and beyond, it could be worth a conversation with one of the Worksmart Market Engagement team, who can talk you through how our award winning RegTech can be used to help firms evidence good consumer outcomes in a variety of ways.
For more information on how Worksmart could help you and your firm through the challenges that CD has presented, reach out to our team of experts at email@example.com or book a meeting to find out how the latest RegTech can help you navigate the Consumer Duty.