On July 31 last year, the long-awaited Consumer Duty legislation came into effect in the UK, following months of preparation and industry attention.
Consumer Duty provides a necessity for financial firms to provide support as and when needed, clear and comprehensible communications, and products and services that align with the needs of the consumer, offering fair value. Under the Consumer Duty, firms are expected to be more transparent and honest, prevent harm to consumers, and actively support their financial goals.
Following a year in existence, how has the rule impacted the industry? In the view of Stacey English, director of regulatory intelligence at Theta Lake, over the past year Consumer Duty has been a catalyst for the industry to modernise outdated practices to deliver good customer outcomes.
She added, “More work is needed to evidence the cultural shift that the FCA expects including the need for firms to proactively identify and tackle issues themselves rather than waiting for the regulator to intervene. Oversight of communications with customers is a fundamental part of the required governance.”
According to English, Theta Lake provides visibility across all channels of communications with customers, from chat, email and SMS to audio, video, whiteboards and more, proactively identifying risks within them and enabling companies to address any potential harm.
“Crucially, these communications records enable regulators to review compliance with the Consumer Duty, plus other obligations, which is more important than ever given the global regulatory scrutiny on recordkeeping, which has already led to more than $3 billion in fines from U.S. regulators for unmonitored communications,” she remarked.
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