Consumer Duty is just weeks away. Years in the making, and with the deadline
now looming, there are plenty of businesses that will see these final few weeks
as the last big push to get ready.
So the big question, it would seem, is how many will succeed? All retail
consumer creditors offering a finance plan, from an independent furniture
company selling a sofa to a plumber installing a new central heating system,
will be affected. But how many, on 31st July, will be able to honestly say that
there is nothing they more could possibly do to support each vulnerable
customer they serve?
The honest answer, I expect, is this: Not many.
Of course, there will be some that simply arenʼt in the running. Those that
havenʼt taken the guidance seriously and urgently need to step up. But the
reality is that even the best will fall somewhere short. There will be few – if any
– in a position to genuinely support their vulnerable customers as Consumer
Duty might ultimately like.
If we take it at face value, this seems a fairly bleak prediction. But if we
interrogate it a little further, weʼll see that it doesnʼt need to be. The trap many
firms are falling into – not just in credit but in all industries – is viewing the
31st July as a finish line. Theyʼre operating under the assumption that if they
can put the required measures in place now, theyʼll be able to tick customer
vulnerability off their do-do lists and move on.
In reality, the end of July isnʼt a finish line. Instead, it should be seen as the
firing of a starting pistol, marking the beginning of a broader conversation and
understanding on vulnerability.
What is the FCA expecting?
Itʼs important to remember that, just like many of the firms rushing to put
Consumer Duty plans in place, the FCA is also new to monitoring vulnerability
outcomes. And while those who do nothing will certainly face repercussions,
the purpose of Consumer Duty isnʼt to punish firms that fall short. What the
FCA wants is for vulnerability to be taken seriously, in a way that one could
argue it previously hasnʼt. The regulator wants to see that the foundations are
in place, ready for us to build on as we develop our understanding.
This idea of development is crucial, when trying to determine where we go
next with Consumer Duty. The entire point is that supporting vulnerable
customers is something weʼll work on and improve at over time. So what the
FCA wants to see on 31st July isnʼt necessarily that everyone has every single
base undeniably covered. What it really wants is to see that weʼre all in the
What do we do next?
If Consumer Duty is really about continuous improvement, then once the 31st
July has passed the goal should be for firms to look at the measures theyʼve put
in place so far and ask how they can go a step further.
For some, providing staff with vulnerability training might seem like the most
logical way forward. But while training is certainly important, it isnʼt
everything. In reality, identifying the most valuable improvements requires a
process of implement, test, refine and learn. We need to assess the data
gathered so far and interrogate it for ways we can improve going forward.
If this sounds daunting, the best place to start is with your own data. Even with
purely internal data, youʼll be able to see whatʼs missing and refine. However,
those who are most successful in their development will also have an external
view. So many rms are new to this process of collecting vulnerability data. If
there are thousands trying to solve the same problem, and to make the same
improvements, it makes all the sense in the world to look at other firms – even
other industries – and try to benefit from their learnings.
What does the future hold?
While some might have been looking forward to putting Consumer Duty
behind them this summer, the reality is that the topic of vulnerability is here to
stay. Over time, as we develop our understanding, the outcomes we deliver for
vulnerable customers will start to gradually improve. But we shouldnʼt expect
an overnight transformation. Weʼll be in escalation for years.
For those looking to make the most of the data available – whether itʼs their
own or from across the industry – a third-party specialist with a technology-
driven assessment tool can help to accelerate the process, removing bias and
subjectivity from the process, and ensuring consistency across a whole client
base. By combining clinical expertise with hard data, theyʼre able to reassure
firms that their systems and controls are affecting the change the regulator is
In the long run, this process will benefit everyone; clients and firms alike. If
youʼre struggling, or if you know that you need to bring in additional expertise,