Consumer Duty: A long-term game changer for consumers and companies alike
The Financial Conduct Authority's (FCA) Consumer Duty rule marks a new era in the financial services industry's relationship with consumers and regulators. At its core, the regulation promotes a pro-consumer ethos, prioritizing the interests of consumers above all else. While the tangible benefits may take time to materialize, the long-term impact promises to be transformative.
Initially, consumers may experience confusion or uncertainty as awareness of the Consumer Duty rule is currently low. However, the regulation will pave the way for a more transparent and consumer-friendly financial landscape. By requiring firms to prioritize consumers' interests, the regulation will create a culture where consumers' needs are paramount. This will lead to products and services that are more aligned with consumers' needs and aspirations.
Embracing this pro-consumer ethos will not only benefit consumers but also firms themselves. By fostering greater trust and loyalty among customers, firms can enhance their brand reputation and competitive advantage. A consumer-focused culture can also motivate employees by enabling them to see the direct impact of their work on customers' lives, leading to increased job satisfaction and productivity.
Ultimately, a company that successfully places consumers at the heart of its operations is likely to enjoy increased consumer loyalty and market share, leading to improved financial performance in the long run. Therefore, it's essential that we work together to raise awareness and understanding of the Consumer Duty rule. The success of this regulation relies on the collective efforts of us all. Let's create a culture that truly puts consumers first and transforms the financial industry for the better.
Director at Compass Research Limited
1 年As a research agency we hate ticking boxes. We’ve been thrilled that our Consumer Duty clients have used their time and money, not only to fulfill their obligation to the FCA but genuinely to invest in engaging customers through improved customer communication throughout their product journey. It’s been a hard slog for all our clients but one that acknowledges the reality that as consumers we’re not all financial experts!
VP, UX Solutions Consulting
1 年Great perspective Ian. The more I look at Consumer Duty, the more I realise it's actually designed to promote customer-centricity, which should make firms and their customers more successful in the long run (i.e. win-win). Of course, there is compliance-level work that needs to be done and evidenced, but that's like a catalyst of the customer-centric cultural shift that's really required.
Delivering Growth Strategies for Founders, Owners and Boards Senior Financial Services Leader I Founder I NED I
1 年The underlying principles are well thought through and once firms get over ticking the boxes then it will make a positive impact. I am not certain that the consumer should ever need to be aware of the existence of consumer duty other than a general improvement in the quality of service. Technology has been fantastic in making processes and procedures much slicker and user-friendly and Consumer Duty will continue this upward curve. I am less convinced about improvements for when things go wrong and you need to speak to a person. I think that there has been a deterioration across the board. What will be interesting is how the FCA plays it. If it is at product levels then products such as CFD and FX could be in for a considerable change. I suspect that it will be at process, procedural, and consumer level it may create less of a step change, but we will see.