Advisory support on the design and implementation of a bank’s Consumer Duty compliance framework

In July 2022 the FCA published new final rules and guidance for a new Consumer Duty that sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first.

Our client requested support and advice in interpreting the guidance and constructing a programme of work to assess the impact on their firm and embed any new requirements into a sustainable framework.

We assembled a team with both consulting and banking industry experience of designing and implementing regulatory change programmes across a broad range of conduct related risks over many years. This included individuals who had:
– led global ‘treating customers fairly’ development programmes, designed to assess and enhance the manner in which customer fairness is achieved, monitored and managed;
– developed, evaluated and improved data sets, designed to assess, on a preventative and detective basis, the outcomes being provided to customers;
– led global remediation programmes covering higher risk consumer processes and controls including complaints handling, structured product sales, financial promotion arrangements, advisory and discretionary portfolio management services and vulnerable customers; and
– worked in asset management businesses both as Private Bankers and operations staff.

Working with the bank’s first and second line of defence teams, we:
– held a series of workshops to explain the requirements and discuss how these might be relevant to the bank;
– reviewed the completeness of the bank’s Consumer Duty implementation plan and the extent to which it covers all relevant systems and controls and all products and services, in an appropriate manner; and
– reviewed and provided feedback on the final plan prior to submission to the Board for approval.

We were able to support the bank to develop an implementation plan that aligns with the letter and spirit of the Consumer Duty requirements. The plan was proportionate and risk based and factored in the specific risks inherent in their customer proposition (considering customer demographics, products and services, and current and proposed organisational strategies).