Why Is The FCA Implementing A New Consumer Duty Plan And When Does it Take Effect?
According to the FCA, the new Consumer Duty plan will introduce a ‘more outcomes-focused approach to consumer protection’ and set ‘higher expectations’ for the standard of care that firms give their customers. It’s hoped this will significantly improve the customer experience and raise levels of trust within the sector. The Financial Conduct Authority also believes the Duty will lead to a simplified and less reactive form of regulator, which it hopes will in turn allow firms to innovate and compete more effectively.
If your business will be impacted by the new Consumer Duty rules, now’s the time to find out everything you need to know and create an implementation plan of your own.
Consumer Duty Plan Deadline
One of the most important things you need to know is how much time you have to put your FCA Consumer Duty implementation plan into action.
There are two deadlines that you need to be aware of. The deadline for open products and services is the 31st July 2023. The deadline for closed products and services is one year later on the 31st July 2024.
Building Customer Trust
One of the main reasons the FCA is introducing the new Consumer Duty rules is to build customer trust. The Financial Conduct Authority believes customers often have a negative view of the financial services sector. It hopes that implementing these new rules will improve the customer experience, raise levels of trust and provide customers with a better overall experience.
Protecting the Consumer
Under the new rules, consumers will be better protected and companies will have a higher duty of care to their customers. Though most financial services providers already place customer satisfaction at the heart of their corporate values. The plan will ensure all businesses operating in the sector adhere to the same high standards.
Another major reason behind the new Consumer Duty plan is the promotion of innovation. The financial regulator believes that the simplified rules will allow businesses to innovate and compete more easily. This should provide consumers with an even wider range of exciting and improved products to choose from.
The financial services sector will only reap the rewards of the new plan if it’s properly realised across the board. With a good implementation plan, consumer duty rules can be rolled out quickly and easily throughout the industry.
One of the best ways to ensure quick and proper implementation is to use independent or external verification. Having a third party check a company’s Consumer Duty policy will help to spot any potential issues and keep standards consistently high.
To find out more about Consumer Duty, and to learn how we can help you with implementation and planning, book a call and speak to an expert member of our team.
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