A fairer, more transparent financial future- are you prepared for the new Consumer Duty regulations?
With the upcoming changes to the Consumer Duty Regulation being only weeks away, some of the biggest challenges retailers face are being able to assess their processes against the principles effectively, highlighting areas for improvement, and ensuring their business can implement any changes.
Coming into force on the 31 July 2023, the guidelines focus on four main outcomes: Products and Services, Price and Value, Consumer Understanding, and Consumer Support. The aim being to help promote transparency, fairness and clarity for consumers interacting with a business.
The new regulations will set higher, clearer standards that require firms to 'put their consumers' needs first', advancing on the previous guidelines of 'treating consumers fairly'.
The ability to plan, measure, implement and showcase changes is critical to harnessing the new principles, but where do retailers start?
- Have an ‘Implementation Plan’ ready for possible FCA (Financial Conduct Authority) checks
- Regular reviews of products and services to make sure they are appropriate and value for money
- Track complaints/feedback to understand how consumers are using products and if this can be improved
- Work with lenders who share the same principles and are compliant under Consumer Duty.
Jon Rix, Director at The Compliance Guys, said: “For retailers, the key points are a clear target market, evidence of products and services being appropriate and value for money, ensuring consumers understand the product and are supported before, during and after the buying process. This requires a plan for investigating current processes, ongoing monitoring of these processes and how changes will be made if necessary.
Retailers must also show all areas of the plan have been considered by someone in a senior position to ensure it covers the principles and is possible for the business to carry out.”
Download the guides for access to the complete checklist here
Implementing a Plan
"As the FCA has proposed 'regulatory principles' as opposed to 'regulatory rules', there's a lot of room for interpretation.", says Shaun Harris, Commercial Director at Codeweavers.
Alongside their checklist, The Compliance Guys have created a complete Implementation Plan covering each area of the new principles and what retailers need to consider.
“We’ve tried to make the Implementation Plan and Consumer Duty guide as simple as possible; however, doing this in our usual #CaringNotScaring stance has been very difficult due to the seriousness of Consumer Duty. People need to start taking action today!” – Jon Rix, Director at The Compliance Guys.
Download the guides for access to the complete Implementation Plan here
How are we supporting retailers?
Retailers are not alone in navigating these changes. The Compliance Guys offer support to any firm that finds financial compliance a maze. While Codeweavers is working closely with their clients and incorporating the new regulatory requirements into their products and services; for example, Codeweavers' 2-Step Apply, Rate for Risk' solution displays consumers' credit scores and eligibility pre-submission, increasing transparency and positive consumer experiences.
Codeweavers work with lenders, retailers, manufacturers, and their compliance agencies to ensure their client integrations are ready for the introduction of Consumer Duty and that they can continue to provide an excellent service to their customers. They have also created a dedicated Consumer Finance Journey Development Team to ensure their Platform, Calculation and Proposal Engine, Point of Sales System, and everything in between can deal with any scenario and fully harnesses the new principles.
In summary, firms must check that products are suitable, priced fairly and have the proper support for consumers. Businesses must understand those consumers to help them achieve their needs. If you need support or do not have a way to record these areas and measure them for improvement accurately, The Compliance Guys offer a comprehensive system that will ensure you remain compliant and save you valuable time.