FCA helps firms prepare for Consumer Duty

It has sent out letters setting expectations for how firms should embed the Duty

FCA helps firms prepare for Consumer Duty

The Financial Conduct Authority (FCA) said it has been supporting financial services firms in their preparation for the implementation of the new Consumer Duty.

The regulator has created a program of engagement, which includes setting out in letters the expectations of the Consumer Duty and arranging a series of regional in-person events for specific groups of small- and medium-sized firms. 

The FCA sent the letters on Friday to a number of financial services sectors, including mortgage lenders and administrators, and retail banks and building societies. Other sectors, including mortgage intermediaries, will also receive letters soon.

“We were encouraged to see many examples of good practice in our review of implementation plans and found that many firms are embracing the shift that the Consumer Duty brings,” Sheldon Mills (pictured), executive director of consumers and competition at the Financial Conduct Authority, said. “We want to thank firms for the hard work they’re putting into embedding the Duty.

“Putting good outcomes for customers at the heart of firms’ strategies and business objectives will build trust and modernise how we regulate financial services.

“Leaders have a key role to play here. We have a world-leading financial services industry which serves its customers, colleagues, and shareholders well through competition, innovation and leveraging talent. We want to see boards and senior management further embed the interests of customers into their firms’ culture and purpose.”

The Consumer Duty is a cornerstone of the FCA’s three-year strategy as it is expected to help the regulator set and test higher standards, and reduce and prevent serious harm. Parliament has given the FCA a mandate to introduce the Duty through the Financial Services Act 2021.

The rules come into force on July 31, 2023 for new and existing products or services that are open to sale or renewal, and on July 31, 2024 for closed products or services.

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