Implementing a Consumer Duty plan: the key deadlines you need to meet

FCA’s Consumer Duty is bringing a range of updated standards for financial firms to comply with. Its goal is to improve the consumer experience in light of the increasing complexity of purchasing decisions for products and services. 

In order to meet the Duty’s upcoming standards, financial firms need to create a comprehensive plan that meets the specific milestones and deadlines set by the FCA. Being aware of these deadlines and understanding how to create a plan is paramount to compliance, which can be enhanced and improved by using adaptive customer-centric technology. 

What are the milestones set by the FCA?

1. Read and understand the final rules and guidance published by the FCA in regards to Consumer Duty.
2. The management body of financial firms needs to have agreed upon their implementation plans to be compliant with the Duty. Enough evidence must also be provided to show the plans have been thoroughly scrutinised to ensure they are robust enough to meet the FCA’s expectations.
3. Firms need to ensure that manufacturers have completed all necessary reviews to meet the Duty’s outcome rules for their existing products and services. This can then be shared with distributors to meet their obligations under the Duty and identify changes where needed.
4. Implementation deadline for new and existing products and services that are open to sale or renewal. This is followed by the implementation deadline for closed products and services.
   

What do financial firms need to do to meet these milestones? 

Understand the requirements of Consumer Duty 

Consumer Duty requires firms to provide their consumers with benefit-focused outcomes. These outcomes can be separated into four key areas:

• Consumer understanding and support - Give consumers a clear understanding of the value and benefits tied to products and services whilst providing continuous support throughout the customer journey. 
• Cross-cutting rules - Be honest, fair and transparent with consumers through clear and consistent communication. Make sure to protect consumers from any foreseeable harm they are aware of that is tied to the product or service. 
• Price, value and benefits - Assess whether products and services meet the needs and objectives of the targeted consumer group, and reevaluate their price and value on how well they achieve these objectives. 
• Governance and compliance - Perform self-monitoring on consumer data and be able to demonstrate you are following the Consumer Duty standards and providing benefit-focused outcomes for consumers.

Analyse gaps and develop a plan 

Gap analysis is a common process for businesses and firms to compare their current performance against their desired end goals to identify the gaps between the two. In the case of Consumer Duty, firms should analyse their current processes, policies and procedures in relation to the four desired outcomes it requires. 

After the results of gap analysis have been achieved, firms need to then develop a plan that addresses these gaps to meet the Duty’s requirements. This includes setting specific objectives, timelines and work streams that take all factors into account to allow the widespread adjustment to Consumer Duty across a firm’s structure. This plan should be overseen by key individuals that can scrutinise decisions, processes and hold the firm accountable according to the FCA’s guidelines. 

Monitoring and compliance 

One of the most significant aspects of Consumer Duty is the self-compliance and monitoring required of financial firms. They need to prove to the FCA that they are providing consumers with benefit-focused outcomes to be compliant with the Duty’s standards. To achieve this, firms need to implement processes and procedures that monitor customer data across their organisational structure. This includes the use of technology such as optimised consumer onboarding, real-time monitoring and system integration to streamline the compliance process. 

Seamlessly integrate your Consumer Duty plan with Bonafidee

Financial firms will need to perform the appropriate analysis and create a comprehensive plan to meet the key deadlines of Consumer Duty. As a result, these firms will need to implement new ways of working to ensure compliance and benefit-focused outcomes for consumers. Customer verification is a prerequisite to every user journey and establishing this compliance, which is where Bonafidee comes in. 

Bonafidee’s rigorous approach elevates us apart from others as the consumer engagement platform of choice. We allow organisations to configure user journeys that are accessible to everyone whilst automating tasks that help eliminate customer abandonment. Moreover, we provide a range of ID verification options that enhance due diligence and optimise costs by removing the need for repeated checks that often arise as a result of fragmented workflows. 

Organisations can no longer rely on standalone identity checks that are unrelated to subsequent demands put on the consumer in unrelated workflows.

Bonafidee enables organisations to complete consent, customer verification, data capture, document presentation and e-signature all in one evidencable process.

Learn more about preparing for Consumer Duty with resources from Bonafidee.