Insight Guide
Consumer Duty Board Reporting: benchmarking your approach
Assess your readiness, identify areas for improvement, and ensure your firm builds a successful Consumer Duty reporting strategy for the future.
This paper explores the challenges firms face in data management, customer outcome monitoring, and fostering a consumer-centric culture. Gain insights into best practices for reporting and communication between different oversight functions and your board.
Key learning outcomes:
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Effective implementation: understand challenges of Principle 12 compliance, communication between lines of defence for board reporting, and the Consumer Duty Champion's role.
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Navigating challenges: identify key challenges in areas like monitoring, culture, and FCA engagement, along with the importance of proportionality in reporting.
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FCA's focus: understand the FCA's approach and emphasis on a developmental mindset, plus how their culture reflects Consumer Duty as a core supervisory principle.
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It’s tools like Clever Nelly that help us to articulate our response to Consumer Duty in a comprehensive way. I would highly recommend Clever Nelly as an indispensable tool for monitoring and driving Consumer Duty across any organisation. It has had a really significant impact in terms of embedding knowledge about Consumer Duty and helping our employees really articulate their role in fulfilling Consumer Duty requirements. It helps just build on our DNA of customer centricity – and we’ve got some great data to back that story up which we’re going to include in our board self-assessment.
Key takeaways include:
Demonstrating compliance with principle 12 is a key focus, with a shift from rules-based to outcomes-based regime posing challenges for firms.
Firms are navigating challenges in outcomes monitoring, culture improvement, and adherence to FCA engagement, with a need for accountability and ongoing governance.
Communication between the three lines of defence is essential for creating a comprehensive and accurate board report, reflecting improvements in culture and adherence to FCA expectations.
The role of the Consumer Duty Champion is critical in ensuring an effective and robust challenge to data and MI gaps, as well as showcasing good customer outcomes.
Proportionality is key in tailoring the board report to the size, scale, and complexity of the firm, as well as the potential level of risk it presents to customers.
Lead indicators are challenging to obtain but are essential for proactive monitoring and intervention, and firms should avoid over-reliance on lag indicators and re-purposing of existing data.
The FCA's own culture reflects a focus on Consumer Duty as a golden thread running through their supervision of the industry, emphasizing the importance of a developmental mindset and a customer-centric approach.
Early engagement with the board, dry runs of the board report, and continual check and challenge processes are crucial for ensuring the report effectively articulates the firm's compliance with Consumer Duty principles and outcomes.