After its most recent review of implementation plans, the Financial Conduct Authority (FCA) has reported that “some firms may be further behind in their thinking and planning for the duty. This brings a risk that they may not be ready in time, or they may struggle to embed the duty effectively throughout their business.”¹
Firms that are at risk of falling short of the immediate requirements need to think carefully – and quickly – about how and when they can catch up. Firms that are feeling optimistic about initial implementations should ensure that their confidence is justified, by examining more closely how their implementation programmes are being executed across the entire organisation. Despite the near-term pressures, all firms should recognise the strategic upside the duty can present and shape plans for seizing the opportunities.
The focus to date has been on tactical priorities, such as naming “Consumer Duty champions”, training staff, conducting product reviews and assessing management information. Those are undoubtedly important steps. However, we noted from our survey and our discussions with executives across the industry, that there is less than full understanding of what is required for the April deadline, particularly in terms of communications between manufacturers and distributors.
Further, there is a distinct lack of clarity in some firms of “what good looks like” for businesses and for customers. Also, few firms have considered the significant, long-term strategic opportunities associated with the duty. That is understandable given the intense focus on compliance under tight deadlines. However, the long-term opportunity to drive competitive advantage and differentiation by creating more value for customers, based on the duty’s principles, should not be overlooked.
This article highlights the key findings of our most recent research and provides insights on where firms are today, what they need to do to ensure they are ready for the April and July deadlines, and how firms can shift the emphasis to strategic actions that will produce business value.