Recent findings from an FCA-commissioned Ipsos UK survey show that 64% of firms believe they will be fully compliant with Consumer Duty by the 31 July 2023 deadline.

The anonymous survey – in which 1,230 firms from 17 portfolios from six sectors took part in – ran between early March and early May 2023 and focused on sectors and sub-sectors where it appeared that firms may have been less engaged and prepared. The regulator’s aims and objectives of the survey was to understand what progress firms have made in preparing for Consumer Duty and what support they need to complete their preparations.

Specifically, the FCA wanted to evaluate:

• Firms’ understanding of the Consumer Duty and how this impacts the delivery of their preparations for meeting it.
• Whether firms have developed plans for meeting the requirements – and the progress they have made in delivering these plans.
• Communications channels firms have used and the effectiveness of these, with a view to informing the FCA on the future communications and support it should provide.
• The impact the Consumer Duty is having on firms’ processes and systems.

Source: EDF, ‘Consumer Duty checklist: what the FCA are looking for in your approach’, webinar poll. Results based on 411 responses. Multiple selection allowed.

Commenting on the Ipsos survey findings, the regulator noted that ‘overall, the findings of these selected firms’ preparedness three months before the deadline confirmed what [they] have been seeing through [their] supervisory work and engagement’.

The FCA noted that there were:

• ‘Very high levels of engagement and understanding of Consumer Duty’, including in many of the sectors where historically regulatory change has had lower levels of engagement. 
• Whilst 64% of firms said they would be fully compliant by the deadline, 23% said they would comply with most requirements by the deadline but would still have some work to do.
• 7% of firms surveyed said they would still have significant work to do after the deadline or had not started work on Consumer Duty.

The FCA also focused on two groups of firms – retail finance providers and debt advice firms – who they noted as ‘scoring consistently lower than others on engagement, understanding, and implementation progress’.

The FCA reiterated that ‘all firms need to make the most of the time before the 31 July implementation deadline’ and issued an overview of next steps for firms to consider:

• Firms that are confident of meeting the implementation deadline need to maintain oversight of their implementation plans to ensure they remain on track to deliver on time. Boards and management bodies should assure themselves that their firm has fully engaged with the details of the requirements and the shift to focus on consumer outcomes. 
   
• Firms that have made good progress but are struggling to complete all the work required before the deadline need to make maximum use of the time available, prioritising action that improves consumer outcomes and reduces risks of harm. Oversight of this prioritisation is essential, and boards and management bodies need to ensure they have identified any potential gaps or weaknesses in their implementation and any action needed to remedy this.
   
• Firms that have not been taking Consumer Duty seriously and are a long way from meeting its requirements need to make strenuous efforts in the next month to accelerate their implementation work, prioritising the work that is likely to have the greatest impact on consumer outcomes.
   
• Firms must alert us if they believe they will be in significant breach of the Duty when it comes into force and should be prepared for FCA to take robust action where we see firms’ failure to implement the Duty causing actual or potential harm to consumers. This could include holding senior managers to account where they have failed to act to implement the Duty and prevent such harm.

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