Over a third (38%) of firms have limited knowledge of the FCA’s new Consumer Duty, with many turning to technology and data to solve their woes.
This finding comes from Moneyhub’s new report, ‘FCA Consumer Duty: Business Burden or Golden Opportunity?’.
The report found that 22% of firms had projects in place to meet the 2023 deadline and a further 28% are currently developing plans to become compliant.
Technology is key to many of these strategies. The report stated that 48% of firms plan to or are already investing in technology to develop and deliver more personalised and targeted communications. Furthermore, 41% also have plans to invest in technology in order to access customer data and insights.
Moneyhub CEO Samantha Seaton said, “There are no excuses left, businesses must ensure they understand their customer completely in order to offer products and services that fit their circumstances throughout the entire duration of their relationship. And the only way this is possible is with an ongoing holistic view of their customer’s financial universe. Open Finance truly holds the key for firms to meet Consumer Duty. But to see Open Finance’s role as solely a solution to a problem is a mistake. It is also an opportunity.
“By better understanding your customer, it means you can offer super relevant, appropriate products and services, and ultimately create stronger relationships and build loyalty. Smart, forward-looking businesses will seize this moment and reap the benefits of truly understanding their customer.”
The new Consumer Duty regulation aims to ensure customers receive communications from financial services firms that they understand. It also ensures they are offered products that meet their needs.
RegTech company Aveni recently released a report that outlined what technology firms need to comply with the regulation. It also outlined four ways how the new legislation differs to the Treating Customers Fairly (TCF) mandate.
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