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Accountability & Competency Consumer Duty SMCR

Navigating FCA’s Consumer Duty Requirements as the Deadline Approaches 

Putting The Consumer First

As the Financial Conduct Authority (FCA) continues to move toward the implementation of Consumer Duty, on July 31, 2024, financial firms must have a full understanding of its requirements and be prepared. This regulation, introduced in July 2023, demands that firms enhance their focus on customer outcomes, ensuring their products and services deliver fair value and meet consumer expectations.  

Understanding the FCA’s Oversight of Consumer Duty Implementation 

Since its introduction, the FCA has actively overseen the implementation of Consumer Duty, aiming to set higher and clearer standards of consumer protection in retail financial markets. To properly implement this regulation and how the FCA monitors these standards, financial institutions need to be aware of expectations, understand common industry pitfalls, and focus on its key areas to ensure compliance. 

Integrating Consumer Duty into ‘Business as Usual’ Practices 

A primary challenge for firms is integrating Consumer Duty processes into their Business as Usual (BAU) operations. Organisations must embed Consumer Duty into their firms’ culture, governance, and operations to maintain compliance and deliver consistent, fair outcomes for consumers. This integration involves several key steps: 

  • Embedding a consumer-centric culture across all levels of the organisation 
  • Establishing a strong governance framework that prioritizes consumer outcomes 
  • Implementing operational processes that consistently deliver fair and transparent consumer interactions 
  • Training staff to understand and apply Consumer Duty principles in their daily roles 

Monitoring Data to Manage Consumer Duty Protocol 

Effective monitoring and reporting are crucial for Consumer Duty compliance. Firms must distil transactional information and other data into comprehensive yearly reporting for the regulators. Automating these monitoring tools with employee compliance software solutions from companies like StarCompliance will help to provide a solid foundation in creating the proper framework to support ongoing compliance and continuous improvement. 

Addressing Closed Book Reporting and Discrepancies 

Closed products, or legacy products no longer actively marketed, pose unique challenges under Consumer Duty. It is essential for firms to have heightened knowledge about Closed Book reporting and outline steps to ensure these products comply with Consumer Duty standards. In addition, organisations must have best-in-class ways to identify and address discrepancies, implement effective remediation measures, and maintain transparent communication with the FCA, mitigating risks associated with legacy product portfolios. 

A Path Forward to Better Understanding Consumer Duty 

StarCompliance (Star) is dedicated to supporting firms in their journey toward Consumer Duty compliance. On July 25, 2024, at 2:00 PM BST, Star is hosting a webinar Consumer Duty Demystified: Insights & Strategies for Compliance to help equip financial institutions with the knowledge and tools needed to meet the FCA’s standards and enhance consumer protection. Michael Lawrence, Principal Consultant at Bovill, who has over 16 years of experience at the FCA, featured in this webinar, will provide attendees with actionable strategies to navigate the complexities of Consumer Duty, ensuring they are well-prepared for the upcoming deadline. 

Register now to secure your spot in this insightful webinar and take the first step toward mastering Consumer Duty compliance. 


For a full list of the FCA Consumer Duty regulations click here.