UK FCA findings on approach to products and services consumer duty outcome

The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of approaches to the consumer duty products and services outcome, identifying good and poor practices. The review was conducted across the banking, insurance, payments, asset management, consumer investments, funeral plans and consumer finance sectors.

Areas for improvement in relation to product and design include generic or overly simplistic target market assessments that fail to adequately reflect customer needs or product risks, and firms describing processes for identifying vulnerable customers without demonstrating how products and services had actually been adapted to meet their needs.

On monitoring and review, while many firms had improved the data they collect to assess customer outcomes, some firms did not use management information effectively to trigger reviews.

On distribution and third parties, some firms provided only generic explanations of their distribution strategies or focused on third-party due diligence without demonstrating how they assessed the suitability of distribution channels. The FCA states that firms should use these findings to reflect on their own products and services and identify where they should make improvements.

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