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Introduced six months ago, Consumer Duty represented a significant shift in the FCA’s expectations for higher standards of consumer protection. As much cultural as it is practical within a firm’s processes, under the rules firms should be open and honest, avoid harm and support their customers in choosing the right products that suit their needs.
The regulator expects firms to have a clear understanding of the new rules, with any gaps or weaknesses identified and remedied. Many lenders have focused on the basics, such as updating compliance manuals with requisite policies and procedures. However, it’s simply not good enough for firms to say that they are adhering to the rules. It’s important that a firm can evidence a proper framework with robust oversight and can demonstrate that consumers have been provided with the correct documentation and suitable products, at a fair value, leading to good consumer outcomes.
ITC works hard with its network member firms to achieve exactly this.
3 ways Consumer Duty could be positive for sales outcomes
1. Ensuring customers are able to make an informed decision
Providing all customers with sufficient information to make an informed decision about the products and services that firms provide will ultimately lead to greater understanding. Coupled with products that provide the right level of benefits, at the right price, and your sales could increase.
2. Using technology to engage customers and improve the sales journey
ITC’s customer facing platforms are improving consumer engagement to ensure customers are provided with the information required to make an informed decision. This helps the dealer to promote sales, whilst addressing potential customer vulnerabilities along the way. ITC’s management information suite and enhanced reporting ensures that outliers can be easily identified against industry standards, whilst supporting our network through ongoing development.
3. Keeping your products and services fit for purpose
A lot has changed in the industry in recent years with technology and increased vehicle prices, meaning products and services may no longer offer the benefit they once did.
With the FCA’s fair value review, including the continued focus on GAP, firms must measure and demonstrate that consumers are sold and receive products and services that have been designed to meet their needs.
ITC encourages all firms to review their current offering to ensure that the products and service levels fit with their customer demographics.
Conducting value measures on all its network providers, ITC reviews products on an annual basis and provides a monthly value statement so that network members can benchmark RRPs across the industry.
While ITC remains agnostic, being part of Fortegra, a multi-national speciality insurer and A- rated carrier, it has experience to know what good looks like and are proactive in product development.
Get a free health check
ITC’s free, no obligation health check will tell you how your firm is fairing against the requirements of consumer duty. Request online today, or simply speak with one of ITC’s compliance experts today.