Implementation: What should firms be doing?

With the FCA’s final timelines for firms to work towards being Consumer Duty-ready now published firms are now focusing on their implementation plans (to the extent that they have not already started planning on the basis of the draft rules).

Implementation timeline

Although the FCA has introduced a phased implementation, the expectation that implementation plans are agreed by the end of October 2022, means that firms should now be taking active implementation steps. Firms should consider:

1. Establishing a steering committee (with appropriate oversight from the governing body) to lead on implementation;

2. What internal and (possible) external resources will likely be required to ensure that the implementation timetable is met.For example manufacturers may need more resources in the short term as they are expected to complete their reviews for existing products by the end of April 2023);

3. Establishing a clear project plan with milestones for each stage of implementation;

4. Establishing a framework policy to guide how gap/business impact analysis should be conducted, e.g. on a product/services basis and/or on a business functions basis;

5. Prioritising the identification of the key areas of risk(s) in the firm’s existing products and services.The FCA has stated that where firms identify serious issues causing immediate consumer harm, they should prioritise action to remedy this;

6. Identifying gaps in MI data required to monitor and report on consumer outcomes.

Implementation plans, board papers and minutes should be appropriately documented. The FCA has said that firms should expect to be asked to share such documents and be challenged on their contents.

Implementation of the Consumer Duty would likely require firms to refine and iterate their framework policy as underlying processes, procedures and controls are reviewed and adapted. Inputs such as learnings from different workstreams should also be shared and support overall implementation efforts.