The implementation of the Consumer Duty regulations will set in motion the Financial Conduct Authority (FCA) three-year strategy of preventing “failing firms from causing significant harm to consumers and market participants”. It requires firms to “deliver good outcomes for retail customers” and exercise caution about causing retail customers “foreseeable harm.”
Artificial intelligence-focused assessment of customer-firm interactions will be vital, and tech vendors are responding from within the burgeoning world of ‘regtech’ to assist firms with cutting-edge software.
The FCA has warned: “If firms assume they can get by largely with repackaging or supplementing existing data, then they risk not thinking deeply or afresh about the types and granularity of data that they will actually need to monitor and evidence outcomes under the Duty effectively.”
Firms outside the UK wanting to sell into the UK are likely to be asked to provide additional information, the FCA says.
Is a similar overhaul underway on EU soil? The European Commission is currently in the “final phase” of preparing its long-awaited “retail investment strategy”, informs Vincent Ingham, director of regulatory policy, European Fund and Asset Management Association.
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