In essence the Financial Conduct Authority (FCA) is asking you to be on the right side of a line in the sand, without drawing the line, and everyone has different ideas.

“As firms set about complying with Consumer Duty, there is clear evidence of divergence risk” Robin Fieth, CEO, The BSA.

One solution in situations like this can be to collaborate with other firms. Pooling your ideas and working with joint purpose is a route to covering more ground faster and to ensuring that your approach is in line with your peer group. The latter is arguably particularly useful should you be required to defend your position.

“There can be wide scope for interpreting a regulator’s requirements within the scope of the Consumer Duty” Eric Leenders, UK Finance.

Many people agree that working with joint purpose offers the next big uplift for both customers and companies alike, with the classic example being fraud prevention, but is Consumer Duty another obvious beneficiary?  This would be welcome news for some of the many firms now struggling to meet the FCA’s tight timelines.

Over 50 per cent of FCA regulated firms are not prepared for incoming Consumer Duty regulation. (Source: Moneyhub)

Care is needed to avoid accusations of antitrust behaviour, but most of the Consumer Duty is a world away. Much of the compliance side is about identifying situations and deciding in good faith what a decent approach should look like. The core decisions are easy, but then there are the more esoteric ones such as the edge cases and those where customers have a change of circumstances.

Finally, there is the most problematic area of all, when good faith actions lead to unintended consequences. Is being connected to a wide network of people, all of them monitoring these problems, one way to minimise such unforeseen circumstances and nip them in the bud?

The FairLife Charity specialises in leveraging joint purpose to solve problems and  it has been working to ensure that finance firms are treating customers fairly for several years.

“FairLife is one of the best ways to good outcomes” Eric Leenders (MD, UK Finance)

Its approach has been designed by industry for industry with input from trade and member bodies including UK Finance, the BSA, TISA and ABCUL.

The charity offers the option of a highly visible fair-trading mark that helps firms to engage with their customers. This can help with evidencing customer satisfaction and understanding, two of the most difficult aspects of Consumer Duty.

“FairLife can be the badge consumers recognise” Robin Fieth (CEO, BSA)

Firms can implement the Consumer Duty completely on their own, but why not consider collaboration? You can find out more from a series of webinars in January 2023 (17, 24 or 31 at 9:30am). Contact stuart@fairlifecharity.org for more information.