At times of economic crisis, those with lower financial resilience are almost always hit the hardest. As a result, the Financial Conduct Authority (FCA) and other regulators expect that firms will treat customers fairly, especially those who are finding themselves in vulnerable circumstances due to the current climate.
This expectation has been closely defined in the final rules published on the Consumer Duty (PS22/9) and the new Principle 12, which aims to ‘ensure good outcomes for customers’. This is where compliance is key.
Compliance plays an important role in helping all retail financial services firms identify and determine the appropriate level of care for vulnerable, or potentially vulnerable customers.
Due to the cost-of-living crisis, there is a behavioural change that compliance needs to take into account when reviewing customer journeys, their Consumer Duty expectations and implementation plans. People are spending more on everyday items and are turning to credit to cover these rising costs. What is needed by firms when assessing customer affordability and vulnerability is a ‘whole life’ picture, rather than a snap shot of their financial circumstances at that particular point in time.
As a compliance consultancy firm, PPL is here to support you, whether that be advice on supporting vulnerable consumers or support setting up your Consumer Duty implementation plan, we have experts in a wide range of retail sectors and are happy to work with you to ensure that you firm is operating compliantly.