On 25 January 2023, the FCA published the results of its review of the Consumer Duty implementation plans of larger ‘fixed’ firms with a dedicated FCA supervision team. The FCA conducted this review to better understand firms’ approach to embedding the Consumer Duty within their businesses. The FCA has published the findings of the review to help firms understand its expectations and implement the Consumer Duty more effectively. The Consumer Duty rules come into force on 31 July 2023 for new and existing products and services that are open to sale or renewal, and 31 July 2024 for closed products or services.

The review highlights good practice and areas for improvement that the FCA found in the following areas: governance and oversight, culture and people, deliverability, third parties, the four outcomes and data strategies.

In terms of governance, the identified areas of improvement were:

• The FCA identified plans that gave little detail on who is leading the overall implementation programme and is responsible for it, or who is leading the various workstreams within the programme.
• In some cases, there was more limited evidence that firms’ boards and committees had properly scrutinised and challenged plans.
• Some firms have been slow to appoint a Consumer Duty board champion.
• A small number of firms did not propose an individual champion or champions but suggested that the role be shared across the entire board or executive. While the FCA has not been prescriptive on the champion role, as it wants firms to implement this in a way that is effective for their business, this is not what it intended and the FCA’s view is that this will not be an effective approach given the extent it is likely to dilute the role.
• Some firms did not include a summary opinion from risk and compliance or internal audit teams on their implementation plan and its risks or chances of meeting the deadline.
• Some plans suggested firms need to further develop their approach on how they will engage with the board and executive post-implementation to provide ongoing assurance that they are meeting expectations under the Consumer Duty. 

In terms of data strategies, the identified areas for improvement were:

• Not all plans clearly explained the data required to monitor compliance with the Consumer Duty. Some plans offered more limited detail of firms’ in-depth consideration of their data requirements under the Consumer Duty and how they will source, package, monitor, govern, and act upon these. 
• In some cases, firms’ data strategies seemed to be largely based on repackaging existing data, with limited consideration of gaps or the outcomes it is intended to monitor. If firms assume they can ‘get by’ largely with repackaging or supplementing existing data, then they risk not thinking deeply or afresh about the types and granularity of data that they will actually need to monitor and evidence outcomes under the Consumer Duty effectively.
• In some plans there appeared to be more limited consideration of how firms will monitor outcomes for different groups of customers, including those in vulnerable circumstances.

Over the remaining 6 months of this implementation period, the FCA wants firms to particularly focus on: 

• Prioritising: Firms should make sure they are prioritising effectively, with a focus on the areas that will make the biggest impact on outcomes for consumers.
• Making the changes needed: The FCA urges firms to ensure they are making the changes needed so consumers receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.
• Working with other firms: Firms need to share information and work closely with their commercial partners to make sure they are all delivering good customer outcomes. The FCA has found that some firms need to accelerate this work to implement the Consumer Duty on time.

In the run-up to the July 2023 deadline the FCA will continue to engage with firms. It will also be sending a survey to a sample of firms to help it understand the progress they are making in implementing the Consumer Duty. The regulator will also be issuing letters to firms, highlighting its key expectations on implementing the Consumer Duty and some of the key risks and consumer harms it is concerned about.