Welcome to The Current Account! We hope you enjoy our latest round-up of the top news from the industry in November.
Headlines from the banking sector this month
In this edition of The Current Account, we focus on the upcoming Consumer Duty regulation, and the growing adoption of AI and Machine Learning, and how the regulators are responding…
Are you ready for Consumer Duty?
- Now that the 31st October deadline has passed, banks are in the midst of their detailed Consumer Duty implementation planning and gap analysis, with some already implementing quick wins that will accelerate their progress ahead of the July 2023-24 deadlines.
- Many firms have already been asked to share their implementation plans with the FCA, even those who don’t have a formal supervisory relationship. This is a level of scrutiny the industry hasn't seen before and enhances the pressure on firms to meet expectations.
- Those firms who have implemented PROD and TCF effectively will be further along the journey, but may not have the behaviours, processes, and technology in place to consider the needs of specific customer groups, including vulnerable customers, that the Duty calls for.
- Although no one firm is the same, we have found that the majority of activity lies in evidencing a customer-centric culture and embedding this throughout Consumer Understanding and Support-related activities. For example, it is no longer sufficient to have a "TCF" tick box in QA logs, and instead, firms should detail the customer outcomes being monitored, evidence actions taken to rectify issues, and document the feedback and/or data used to continuously improve comms and support services delivered.
- Equally, many firms have a culture or purpose statement focused on "acting responsibly towards our customers", but declaring this externally and/or internally is not enough. The FCA can and will ask for evidence of how this is embedded at all levels, at any point in time, and firms must be ready to prove adherence.