Combining the new Consumer Duty rules with ISO standards focussed on addressing consumer vulnerability will create holistic service levels that go beyond the latest regulations, explains Michelle Hoskin, managing director Standards International.
As we peer into the future of service delivery, financial controls, and regulation, we find ourselves at the threshold of a remarkable transformation. At the very heart of this exciting era is the looming deadline for the implementation of the Consumer Duty rules – an initiative by the Financial Conduct Authority (FCA). These intricate rules, applicable to all regulated firms, are meticulously designed to ensure firms contribute earnestly to achieving commendable outcomes for retail customers.
Decoding the FCA’s Consumer Duty: A Game Changer
The adoption of a principles-based approach to running a business has always been at the forefront of our coaching. As expected, we are thrilled to see the cornerstone of this sweeping regulatory transformation lies in the introduction of a unique Consumer Principle. This principle obliges firms to act in a way that consistently promotes beneficial outcomes for retail customers. Adding gravitas to this principle are the encompassing cross-cutting rules that provide a lucid roadmap of the FCA’s expectations. These rules serve as a guiding compass to understand and implement the four clearly outlined outcomes.
These outcomes, pillars supporting and strengthening the firm-customer/client relationship, span various aspects such as product and service delivery, price and value, consumer understanding, and customer care and support. This wide-ranging setup reinforces firms’ obligation to consider an array of factors, including customer needs, characteristics, and goals – particularly those displaying signs of vulnerability (which is a big topic for us) – at each stage of the customer journey and experience.
More now than ever with the raising living costs and the backlash of the pandemic, the FCA’s own data shows that in May over 9 million people were over-indebted and finding it a heavy burden to keep up with household bills. This is up by over 2 million since 2020, and shows us all that consumers are more vulnerable than ever before… enter ISO 22458…
ISO 22458: Beyond Consumer Duty
As we navigate towards this impending deadline and the transformative epoch it ushers, we cannot ignore the growing importance of addressing consumer vulnerability in a more holistic sense as it is safe to say, the human race is way less reliant than we have ever been and as such are susceptible to vulnerabilities, which may never of before been realised.
The focus of vulnerability lies at the heart of ISO 22458, the internationally recognised standard that sets a benchmark for identifying and appropriately responding to customers in vulnerable positions.
ISO 22458 provides a structured blueprint for a vulnerability-centered approach to service design and delivery. It recognises the ubiquity of vulnerability, understanding that anyone can find themselves in such situations and that vulnerability can present in a plethora of ways, whether situational, temporary, or enduring.
Embracing the ISO 22458 standard does not merely imply regulatory compliance. It nurtures a culture of social and ethical responsibility within firms, enhances empathy amongst teams, and ensures superior outcomes at every stage of the customer journey.
Fusing the FCA’s Consumer Duty with ISO 22458: A Perfect Symbiosis
A potent synergy emerges when integrating the principles of the FCA’s Consumer Duty with the guidelines prescribed by ISO 22458. Can you envision a future where firms not only recognise the vulnerability of their customers but also endeavour to make their experiences as beneficial as possible?
The convergence of these regulatory frameworks broadens the horizon, highlighting the importance of developing a deeper understanding of customers. Firms are now expected to engage with the multifaceted landscape of vulnerability, providing necessary support to their customers at every step.
With the introduction of these regulations, the financial and service sectors are on the brink of significant change. The spotlight is shifting towards a more inclusive, vulnerability-sensitive approach, urging businesses to adapt their strategies accordingly.
As we move towards this new dawn, how will your firm choose to shape its future?
Join us on our mission to foster a service culture that is truly attuned to the needs of vulnerable individuals, ensuring no one falls through the cracks. We’d be happy to discuss how this could work for your business.
