Key actions for firms (Preparing for the consumer duty*)

1. Defining and monitoring good customer outcomes

• Creating a framework for monitoring customer outcomes, based on appropriate data and MI, will be challenging
• Having the right governance to review data, identify and action concerns – and to avoid foreseeable harm – will be key

2. Scrutiny over subjective judgments

• The proposals require firms to make judgments on a number of subjective FCA concepts, such as ‘foreseeable harm’ and ‘fair value’
• Firms will need to define these concepts, tailored to their business and products and services
• The outcomes-based nature of the proposals gives firms greater flexibility in how they interpret the changes that are required, but the lack of prescriptive guidance can present difficulties

3. Managing overlapping rules

• Firms will need to reconcile the proposals with existing rules and requirements, and with related change programmes
• This could be onerous, particularly for those businesses offering a range of product and service types

4. Accountability

• Firms need to consider the impact of the proposals on staff (through the new conduct rule) and on how senior managers perform their duties and fulfil their obligations
• Firms should be prepared to deliver tailored staff training and embed the changes in governance and accountability structures

5. Supporting and empowering consumers

• Firms will need to evaluate how they support customers through their financial journeys and enable them to make decisions in their interests and to pursue their financial objectives