FCA introduces new Consumer Duty to drive a fundamental shift in Financial Service industry

The Financial Conduct Authority, on the 7th December, published a new consultation which sets out more developed proposals for new rules to deal with the causes of  harmful practices for consumers.  In this way, industry standards will put more emphasis on firms to get products and services right in the first place.

The new FCA plans will ensure a higher and more consistent standard of consumer protection for users of financial services and help to stop harm before it happens.

The new FCA rules should prevent that firms:

  • present information in a way that exploits consumers’ behavioural biases
  • sell products or services that are not fit for purpose
  • provide poor customer support

The new rules will require firms to focus on supporting and empowering their customers to make good financial decisions and avoiding foreseeable intolerable harm at every stage of the customer relationship. 

Based on this, firms will have to:

  • provide consumers with product and service information in a way that is clear and they can fully understand,
  • offer products and services that are fit for purpose
  • provide helpful customer service

The FCA is concerned that currently, financial service firms do not always do their best for the protection of consumers. So in this way, the proposal would ensure that consumers are protected not only from harm like for example a disruptive IT outage, but also from the damage of not having sufficient, clear and accessible information about the products and services

The consultation is open until 15 February 2022  and the FCA expects to confirm any final rules by the end of July 2022. 

How FourthLine can help:
FourthLine is working with several clients to help them achieve compliance and react to the challenges of the new operational resilience regulation, designed to protect consumers from intolerable harm, through a mixture of consulting and resourcing services.

You can get in touch here to find out more about our tailored and proportionate responses to Operational Resilience compliance.

For further insights on Operational Resilience, go to our Operational Resilience micro-site.

 

Topics: Featured, Risk Management, Insurance, Professional Services, Flexible, SMCR, Learning, operational resilience, Third Party Risk Management, consultingservice, riskconsulting

December 9, 2021
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Stefania Saccomanni
Written by Stefania Saccomanni

Stefania is the Sales Business Manager at FourthLine, helping to drive business growth by creating engaging written and visual content.