The Financial Conduct Authority (FCA) has warned that some companies are falling behind in their planning for the introduction of the Consumer Duty regulations.
Consumer Duty, which will require evidential proof that companies are putting customers first in every area of their business, comes into force on 31 July.
However, the FCA has found that while some organisations are on track for compliance, others have not yet made material progress.
It has urged those organisations to focus on three key areas in the next six months: Prioritise the areas that will make the biggest impact on outcomes; concentrate on improving communication with customers; develop stronger relationships with supply chains to ensure all commercial partners are delivering good outcomes.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said, “Given the scale of the reform, we recognise that some firms need to make significant changes. For firms which are further behind in making the necessary changes, there is time to put that right and for them to show they are acting in the spirit of the new Duty.”
However, the review has set the alarm bells ringing at DataLab, which believes the FCA findings should be a real concern for the insurance industry.
Co-founder Matt Scott said, “The regulator has highlighted a number of areas where insurers are falling behind their expectations and it has raised some very real concerns that insurers may not be ready in time. It has also raised the fact that it believes some insurers may also struggle to effectively embed Consumer Duty within their business without a change in approach.
“The idea of Data Strategies was explicitly referred to in this review for the first time, and it expressed concern that insurers were not properly considering their data requirements when it comes to monitoring customer outcomes.
“At Insurance DataLab we want to work with our partners to help insurers improve customer outcomes through proper monitoring and analysis of data across a range of customer experience points. At a time when the scrutiny from the FCA is intensifying this doesn’t only make business sense, but it is also becoming a regulatory imperative.”
