The Impact of the Consumer Duty Act on the Financial Landscape

The Consumer Duty Act has sent ripples through the financial industry in the United Kingdom, heralding a new era of customer-centricity and regulatory scrutiny. In this blog post, we'll delve deeper into the impact of the Consumer Duty Act on the financial landscape and its specific implications for banks and financial service firms.

A Shifting Landscape: The Consumer Duty Act's Influence

The Consumer Duty Act represents a profound shift in how the industry approaches customer outcomes. Moving from merely avoiding poor outcomes to actively seeking good outcomes demands a cultural transformation within organizations. Customer-centricity is no longer an option; it's a mandate.

The Challenges Ahead

With the compliance deadline looming, firms, especially those dealing with closed book products, face unique challenges. The complexities of managing legacy business on outdated systems and the need to align with new regulatory requirements make the road ahead a challenging one.

The Regulatory Focus on Customer Outcomes

The Financial Conduct Authority (FCA) has demonstrated its commitment to enforcing the Consumer Duty Act. Public debates over issues like de-banking and interest rates have underscored the FCA's resolve to ensure good customer outcomes.

The Way Forward

In navigating the Consumer Duty Act, firms must adhere to clear and consistent FCA expectations. Governance arrangements and self-attestation, preparing closed book products, gaining assurance over compliance, and optimizing implementation are crucial steps in this journey.

Conclusion

As the Consumer Duty Act continues to reshape the financial landscape in the UK, firms must adapt swiftly. Embracing a customer-centric culture, addressing compliance challenges, and seeking expert guidance are essential for thriving in this new regulatory environment.

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