MorganAsh comments on Consumer Duty anniversary and today's FCA webinar

31 July 2024

One year on from Consumer Duty: good start, but just the beginning.

Following the FCA’s webinar today to mark the one-year anniversary of Consumer Duty coming into force, along with the deadline for all closed products and services, we have a comment from customer vulnerability and Consumer Duty specialists, MorganAsh.

MorganAsh provides the award-winning MorganAsh Resilience System (MARS) which enables brokers, advisers and financial services firms to better manage and evaluate customer vulnerability and comply with Consumer Duty. It is in use across the financial services and the utilities sectors.

Andrew Gething, managing director of MorganAsh, said: “Today marks the first anniversary of Consumer Duty, and also the deadline for closed products and services – meaning the new regulation is now fully in force across financial services. While there was nothing new in the presentation today, the FCA reinforced the focus on data and consumer data as the back-bone to understanding consumer characteristics. It was good to hear of the changes to fair value assessments and the significant financial savings to consumers.

“Firms should be comforted on the co-operation from the FOS as we know many firms are concerned how Consumer Duty will be interpreted by the FOS.

“In its first year, it’s fair to say Consumer Duty has received a mixed response from the sector – while some have really seized the opportunity to stay closer to clients and deliver far better outcomes, others are still yet to fully demonstrate the change the FCA wants to see.

“Perhaps the best example is in their approach to identifying and monitoring vulnerable customers and ensuring the outcomes they receive are no worse than the resilient. While the FCA suggests that as much as half of all UK adults are vulnerable in some way, many firms are still reporting few or even zero vulnerable customers. It’s clear therefore that many firms still lack the technology and processes critical to gathering the necessary data to meet this requirement.

“One year on, many firms are still yet to fully grasp the opportunities of available technology to turn Consumer Duty from a regulatory requirement and into a competitive advantage. Platforms exist to not only assess and monitor consumers in a consistent and objective way, but to build all the necessary management information to meet reporting requirements. Systems such as MARS (the MorganAsh Resilience System) can even offer suitable next steps at the very moment vulnerable characteristics are identified – helping firms deliver a stronger, more valuable service that engenders customer loyalty.

“There will always be those firms hoping to skate under the radar, or believe they are ‘too small’ to worry the regulator under proportionality rules. The FCA confirmed today that it is taking a collaborative approach to assist firms in their adoption of Consumer Duty, in recognition of it being a major change. Equally, the regulator confirmed it will enforce the new regulation, especially where it has informed firms they need to make improvements. While much focus has been on meeting Consumer Duty, attention is now turning to how Duty can help firms better understand and meet their customer’s needs, demonstrate good outcomes and gain a competitive advantage.”