The FCA recently published the findings of their review into firms’ approaches to completing the first Annual Consumer Duty Board Report. The examples of good and poor practices got me wondering how technology can support firms to implement the review recommendations.

We have many clients using FileChecker to help them assess and manage their Consumer Duty so I grabbed a cup of coffee and took a close look. Here’s what I discovered:

Strengthening governance

Effective governance is critical for firms to demonstrate compliance with Consumer Duty. According to the FCA, some firms struggled to provide evidence of robust board oversight, effective challenge, and clear ownership of action plans. FileChecker helps firms address these governance shortcomings by:

• Automating reporting processes: streamlines the preparation of board reports, ensuring that key stakeholders, including the second and third lines of defence, are all working from a single source of truth.
• Embedding oversight mechanisms: corrective actions are identified and monitored through to completion meaning that all stakeholders have clear line of sight over current performance and action taken to improve it – and can evidence it!
• Enabling evidence-based decision making: comprehensive file review data empowers boards to challenge and validate findings fostering a culture of transparency and continuous improvement.

Enhancing data quality

The FCA’s report highlighted poor data quality as a critical area for improvement, noting that insufficient data undermines firms’ ability to monitor customer outcomes effectively. FileChecker significantly enhances data quality by:

• Centralising data management: it consolidates data across the file review process, and provides interactive reports, drill downs and dashboards.  No additional compilation of data is required to track, for example, how outcomes are improved over time.
• Supporting vulnerable customers: firms can easily analyse and compare outcomes for different customer groups, including those with characteristics of vulnerability, ensuring that fair value and appropriate support are consistently delivered.

Supporting Consumer Duty outcomes

FileChecker is aligned with the FCA’s four Consumer Duty outcomes:

1. Products and services: facilitating detailed file reviews helps firms ensure that products and services meet customer needs and deliver intended benefits.
2. Price and value: enables firms to conduct rigorous fair value assessments, identifying areas where pricing structures or benefits may need adjustment.
3. Consumer understanding: supports the evaluation of customer communications, ensuring that information is clear, accessible, and promotes informed decision-making.
4. Consumer support: tracks the quality of customer interactions, enabling firms to enhance support services and address any gaps in service delivery.

Driving continuous improvement

The FCA’s review emphasises the importance of taking effective action and demonstrating the impact of those actions on customer outcomes. FileChecker facilitates continuous improvement by:

• Action tracking: records corrective actions, assigns accountability, and tracks their effectiveness over time.
• Feedback loops: by integrating all stakeholders including operational management, advisers, sales consultants, and the first, second, and third lines of defence, FileChecker provides firms with valuable insights to refine their practices and improve consumer outcomes.
• Benchmarking performance: MI dashboards enable firms to track their performance over time, identifying opportunities for further enhancement and demonstrating how actions taken have led to improvement.

Conclusion

Technology can play a role in many different areas of compliance, but it’s important to select the right tool for the right job. FileChecker may not be the right solution for everyone, but if you are a firm which uses file reviews as one of the essential tools for assessing your Consumer Duty –  such as Wealth Managers, Stockbrokers, IFAs and Insurance firms – then it’s worth taking a closer look.

To book a 30 minute demo just get in touch. I’d be delighted to show you how it may be able to strengthen your governance, risk and compliance, and help you to deliver fair value, build trust, and foster long-term customer relationships.

Author: Ben Mason

Date: 20th September 2024