With the Consumer Duty live date of 31st July now only weeks away, it’s inevitable that devising and embedding a sustainable compliance strategy will be dominating firms’ attention for the foreseeable future. And despite the approaching deadline, it seems like not all firms have given adequate thought to the wider implications of the regulations.
For example, an FCA report published earlier this year noted some firms ‘may have considered the requirements superficially or are over-confident that their existing policies and processes will be adequate’. And beyond that, there’s significant anecdotal evidence to suggest a sizeable cross-section of the industry are still unsure how they’ll manage to sufficiently evidence good outcomes without expanding the time, budget and financial resources dedicated to QA reviews.
But with the Consumer Duty raising the bar for customer protections, transparency and accountability for regulated firms to such a degree, it’s clear that oversight will need to be stepped up across the entire customer journey – spanning the sales, service, advice and collections processes.
So, let’s remind ourselves what the regulator will be expecting of firms:
Consumer Duty: Promoting proactivity in the customers’ interests
Looking to move beyond the Treating Customers Fairly initiative and current FCA Handbook’s Principle 6 (‘A firm must pay due regard to the interests of its customers and treat them fairly’), the Consumer Duty will expect businesses to proactively work to ensure their customers receive good outcomes from their services.
This directive common thread throughout the three Cross Cutting Rules, which mandate that firms:
- Act in good faith towards retail customers
- Avoid causing foreseeable harm to retail customers
- Enable retail customers to pursue their financial objectives
The new regulations also contain a particular focus on tackling vulnerability and ensuring that those with vulnerable characteristics aren’t disadvantaged. In other words, making sure that consumers at greater risk of harm receive the same quality of outcomes and customer service as any other.
So, whereas before it was sufficient for firms to simply ‘do no harm’ to their service users, now businesses will have to prove they’re going the extra mile for clients – and actively looking out for any potential risk points that could lead to negative results for customers.
By the same token, firms will also be required to evidence both the delivery of positive outcomes for their customers and that any negative outcomes are investigated, dealt with and learned from.
Where does AI RegTech fit in?
When faced with these new obligations, it’s clear that firms will need to implement new monitoring and oversight tools to achieve the level of supervision the regulator is looking for.
In particular, businesses wanting maximum visibility of risks – be it customer misunderstanding, unsuitable advice or unsatisfactory process adherence – are going to require a robust and reliable method of reviewing customer calls and interactions: random sampling isn’t going to cut it anymore.
And that’s where ConversationReviewAI comes in.
With 100% oversight of all your customer calls transcribed and risk scored through sophisticated AI, your team can dedicate their precious time to the calls most in need of human review – and easily evidence your Consumer Duty processes to the FCA.
Introducing ConversationReviewAI: Get our guide to learn more
In our guide, we take a closer look at the transformative impact of AI RegTech, and Compliance Analytics platforms like ConversationReviewAI, on firms’ Consumer Duty monitoring and evidencing strategy.
Download your copy to discover how:
- Machine Learning-powered RegTech offers a critical extra line of defence against potential consumer harm
- Firms can finally move beyond random sampling towards a 100% oversight model of QA – gaining greater insight into compliance and conduct risks in the process
- A targeted, risk-based approach to call reviews can level up your compliance strategy and maximise human productivity
