Ken Palla’s Post

The FCA's publication of the outcomes of its multi firm review of consumer duty implementation is must ready for payment and e-money firms, as it contain what the FAC see as good and bad practice. For other firms, it useful to to review these findings, as in my view there useful read across messages e.g. FCA's view that the level of detail required in defining target market for low risk vs high risk products. The things that jumped out of the this report for the report are: 💡 that just under 50% for firms that the FCA reviewed had only partially implemented consumer duty and so required significant work to undertaken to comply with it 💡 continued theme of lack of challenge and "confirmation bias" that a firm does, is already meeting the consumer duty standards 💡 lack of firms being able to evidence what they done and why 💡 continued lack of detailed MI linked to consumer duty

💸 The Financial Conduct Authority has today published its findings from its review of payments firms' implementation of the consumer duty. 😬 It found that just under half of payments firms had "only partially implemented the Duty and required significant work to comply with it" and that as a result represent a "moderate or higher risk of delivering poor consumer outcomes". Some (selected) takeaways: 🗝️ The consumer duty requires higher standards than some firms had appreciated/expected - each firm needs to do the work to define its target market and what a "good customer outcome" looks like for it (rather than relying on existing processes and controls). 🗝️ When looking at products and services, each firm should define its target market (riskier products should have narrower target markets) and monitor any activities delegated to agents. 🗝️ Firms need to be able to come to a conclusion as to whether they are delivering "fair value" (and be able to explain why they've come to that conclusion). 🗝️ Firms should consider testing communications, and need to have a way of monitoring customer understanding. 🗝️ Consumer support (signposting in the first place, and then dealing with customer concerns/complaints) is an area for improvement. ℹ️ Many of the points above require firms to carefully consider whether they have the management information to enable compliance with the consumer duty - the FCA said: "A key part of the Duty is that firms assess, test, understand and evidence customer outcomes. Without this, it is impossible for firms to know if they are meeting the Duty’s requirements, and good MI is central to that." Firms which have been sampled have been given individual feedback, and it's likely that at least some of those in the "naughty corner" will have some extensive work to do to meet the FCA's expectations. We are likely to see the FCA taking some action off the back of this multi-firm review (at the very least, if firms don't react quickly to the feedback). Let me know what you think in the comments 👇🏻 https://lnkd.in/egbsT_wW #payments #FCA #regulation #emoney #paymentservices #UK #financialservices #consumerduty

The FCA has released its review of how payment firms are implementing the Consumer Duty. Here are some high-level observations on the good and bad practices highlighted by the FCA. 1.     Documentation, documentation, and more documentation - Firms had difficulty providing clear, documented evidence of their approach to the Consumer Duty. This underlines the need for thorough documentation of all assessments conducted and clearly outlining governance processes. 2.     Consumer-Focused Actions - Firms frequently relied on existing MI and controls to demonstrate good customer outcomes. The FCA expects firms to take more deliberate actions in collecting new data artefacts and enhancing controls to ensure good outcomes. Ultimately, the FCA considered just over half of the 23 firms reviewed as 'satisfactory,' judging them as not posing a risk of significant poor consumer outcomes. These findings suggest that the FCA will continue to supervise closely and seek assurance that the industry genuinely embraces the principle of Consumer Duty.

The FCA have published details of their multi-firm review of consumer duty implementation in payments firms. Lots of examples of good and bad practice with a lot of insight into the FCA's expectations for all types of firm: https://lnkd.in/dRTt2KTv

IN THE NEWS 📰: The FCA has recently released a crucial update for payments firms across the UK – a set of their key observations drawn from payment firms’ implementation of Consumer Duty. The UK regulator took the opportunity to emphasise the ‘fundamental’ nature of Consumer Duty, especially in how it has set a higher bar for firms to meet. With just under half of the firms reviewed having only partially implemented and complied with Consumer Duty, there is significant work outstanding, presenting a risk of poor consumer outcomes. TAKE ACTION 🪜: If you would like to take the first step to responding effectively to this FCA update, read my article (linked in the post below), which explores some of the most crucial takeaways of best and poor Consumer Duty practice identified by the FCA. Please feel free to get into contact if you would like further information and our team at Thistle Initiatives will be happy to set up a discussion. #consumerduty #fca #payments #regulatorycompliance Lorraine Mouat Anthony Corner Alejandra Gorría Zaldivar Alejandro Bondjale Hinestrosa Joel Bailey Andromachi Metheniti

The FCA has just published a report on Consumer Duty implementation by payments firms. Key takeaways for firms: - Don’t underestimate the risks of payment products compared to investment products. - Don’t rely on pre-existing systems and controls and existing MI measures. Make sure changes have been made in response to the Duty and use robust governance and control frameworks to scrutinise and challenge implementation of the Duty. - Clearly define your target markets. Don’t set these too wide. - Have good supporting analysis for fair value assessments. Don’t limit analysis to benchmarking prices against competitors. Consider how charges might affect different customer groups. - Pre-test consumer communications and monitor afterwards for consumer understanding. - Clearly signpost customer support channels and act in response to complaints information. - Make sure oversight and ongoing monitoring of agents is effective. Consumer Duty champions should make sure they bring matters to the board’s attention and board minutes should reflect effective challenge on implementation and compliance. - Remuneration and incentive policies need to be reviewed in light of the Duty. The FCA’s report can be accessed via the link below. Please do get in touch if you’d like to chat about any of this in more detail! Payments Consumer Duty multi-firm review | FCA #ConsumerDuty #paymentservices #FCA #paymentsfirms #CMSFSReg

The Financial Conduct Authority's recent multi-firm review of 23 payments firms highlights key insights into how the Consumer Duty is being implemented. While some firms are demonstrating strong governance and proactive compliance measures, others are falling short in areas like fair value assessments and evidence-based reporting. Learn more about the FCA’s findings and actionable steps for payment firms in our latest update. https://lnkd.in/eVzyQzk8 #ConsumerDuty #FCA #UKRegulation #PaymentFirms

Key Actions for Payments Firms Following FCA Multi-firm Review of Consumer Duty compliance The FCA's recent multi-firm review of 23 payments firms' implementation of the Consumer Duty has highlighted several critical actions for firms to ensure compliance and deliver good consumer outcomes. Half of the firms fell below compliance levels, require significant work and present a moderate or higher risk of delivering poor customer outcomes. With serious non-compliance, firms business may be restricted. Here are the key takeaways (please do refer to FCA page for full details): - Ongoing Evaluation: Continuously assess products, services, and processes against the Duty rules and guidance. Ensure consumers are at the heart of your business operations. - Address Gaps: Promptly: Identify and address any compliance gaps immediately. Implement plans to rectify shortcomings and mitigate potential harm. - Governance and Control: Establish strong governance and control frameworks to scrutinise and challenge the implementation of the Duty. Regularly review and approve assessments of consumer outcomes. - Consumer Understanding: Pre-test and post-test communications to ensure they are clear and support informed consumer decisions. Use comprehensive management information (MI) to monitor and improve consumer understanding. - Effective Consumer Support: Provide accessible and effective support channels tailored to the needs of your target market, including vulnerable customers. Address any support shortfalls promptly using MI and complaint data. At PwC, we understand the complexities of regulatory compliance and are here to support our clients in navigating these challenges. Our team of experts is ready to help you implement these key actions and ensure your firm meets the FCA's high standards. Feel free to reach out to us for more information or support #FCA #ConsumerDuty #PaymentsFirms #PwC #Compliance #CustomerOutcomes #FinancialServices https://lnkd.in/exAwHS9K