With the July 31 deadline for complying with the new Consumer Duty drawing closer, the FCA has sent detailed letters to firms in eight sectors of the financial services industry as part of what it calls a “program of engagement”.

The letters set out the regulator’s expectations, provide a reminder of the requirements of the Consumer duty, and offer resources to help with the process of compliance. The FCA is also setting up a series of regional in-person events aimed at small and medium-sized firms.

Letters have been sent to firms in the following sectors;

• asset management, custody and fund services and alternatives;
• consumer investments;
• credit reference agencies and providers of credit information services;
• general insurance and pure protection firms;
• life insurance;
• mainstream consumer credit lenders;
• mortgage lenders and administrators;
• retail banks and building societies.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: “’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.”

Cornerstone

The regulator sees the Consumer duty as “the cornerstone” of its three-year strategy, and says it aims to introduce “a more outcomes-focused approach to consumer protection” and set “higher expectations for the standard of care that firms give customers”. And, it says, “The FCA also believes the Duty will lead to a simplified and less reactive form of regulator, which will allow firms to innovate and compete more effectively.”

But research carried out by the FCA recently found that a significant number of companies were struggling with the new requirements. The latest move is further evidence of the FCA’s determination to make this work.

Firms in the following categories are set to receive similar letters shortly;

• credit unions;
• debt advice firms;
• debts purchasers, collectors and administrators;
• mortgage intermediaries;
• motor finance providers;
• payments services and e-money;
• retail finance providers;
• credit brokers.