Context
The FCA has published a blog by Jonathan Pearson, FCA Head of Consumer Policy, about progress towards the ‘Year 2 Board report’, and what comes next. Under the Consumer Duty, firms must report annually on what their monitoring found about customer outcomes, and what actions they will take as a result. Pearson observes that firms have improved, but more progress is needed as he reflects on what firms and the FCA have learned from ‘year 2’.
Key points to note and next actions
- In comparing ‘year 1’ and ‘year 2’ reports, the blog notes where reports have improved. In particular, there is commentary about stronger governance and clearer Board oversight, better action plans and ownership, and broader and more insightful data.
- Under the heading ‘Where firms need to do more’, there is commentary under these headings:
- Clearly link data to customer outcomes
- Monitor outcomes delivered by third parties
- Evidence meaningful Board challenge
- Deepen assessment of consumer understanding and support
- Pearson notes that, looking ahead, the improvements the FCA has seen show that firms continue to move in the right direction, and the FCA wants firms to draw on these insights as they approach their 3rd year submissions.
- Firms should continue strengthening their outcome monitoring, governance and distribution oversight so that the Duty continues to deliver good outcomes for consumers.
- The FCA will continue to support the industry by sharing examples of good and poor practice in relation to Consumer Duty Board Reports, including providing extra insights to help smaller firms apply the Duty.