.jpg)
As the anniversary of the Consumer Duty’s implementation is close approaching, a core element of its guidelines will soon come into action: the annual Consumer Duty board report.
With a deadline of 31st July 2024, this report is an annual requirement for firms. But as this is the first since the Duty’s introduction, the FCA will be particularly eagle-eyed when it comes to firms that fail to meet their standards. This can then result in legal repercussions that damage customer relationships, highlighting the importance of being prepared ahead of the deadline.
In this article, we delve into the expectations set forth by the Consumer Duty Board report, emphasising the importance of readiness and strategic planning. We will guide you through the key steps necessary to ensure your business meets the FCA’s expectations, setting a strong precedent for future compliance and customer-centric practices.
Understanding the requirements of the Consumer Duty Board Report
The annual Consumer Duty board report is in essence an internal review and approval process by a firm’s board to establish whether they are delivering good outcomes for their customers. For businesses, this is a chance to demonstrate conformity to the Duty’s guidelines and build brand loyalty with their customers. But at the same time, the closing deadline of the report is a wake-up call to prepare diligently for this landmark event in the Consumer Duty timeline. This highlights the importance of being prepared ahead of the deadline to avoid potential regulatory action that can cause irreversible brand damage.
Expectations when reporting for Consumer Duty
- Evidence of customer outcomes - The report will demand thorough and comprehensive documentation of all customer monitoring results; from the worst to the best outcomes.
- Self-governance and scrutiny - Firms need to demonstrate that they can effectively identify and scrutinise poor outcomes for customers, showing they're committed to understanding and solving these issues.
- Implementation and evidence of actions moving forward - The report will require firms to outline a detailed plan of action to improve customer outcomes, along with evidence that supports how these actions will make a difference.
Steps to prepare for the First Annual Consumer Duty Board Report
Comprehensive documentation to show to your board
You need to maintain detailed records of your customer outcomes and customer feedback/responses to illustrate your active engagement and resolution efforts. This means having data monitoring and evidence management systems in place so that you can have quick and easy access to relevant data and documented interactions comprehensively.
Be transparent with your operations
Prioritising transparency with your customers, operations and board shows your commitment to the Duty’s guidelines. Sharing clear and accessible information about products and services, as well as openly communicating challenges and possible improvements, helps you build trust with customers. Moreover, it shows the FCA you’re committed to the Duty’s guidelines, setting you up confidently ahead of the report deadline.
Be willing to change for the better
It’s almost guaranteed that the board will highlight areas that need improvement in regards to the duty’s guidelines. This is why it's vital for you to be prepared to use feedback and data constructively to refine your products, services and customer interactions to reach those beneficial outcomes.
Have your evidence in check before the annual deadline
Preparing for the annual Consumer Duty board report is an opportunity to not only comply with regulatory expectations but to drive meaningful improvements in customer service and operational transparency. The next crucial step is identifying and compiling the specific evidence that will support your claims of compliance and customer-focused improvement as well as demonstrate your proactive approach to regulatory obligations and customer welfare.
Stay tuned for our next article, where we will explore the types of evidence you need to include in your report, how to gather this information effectively, and how to present it in a way that resonates with both your board and the FCA.
If you don’t want to wait to start uncovering any gaps in your evidence management process, we have created an example of what a best-practice evidence pack looks like. View it here to begin shaping your approach to strategic evidence collection.
