Compliance Digest: 28th June 2024
Here we are at the end of June, and we have had some warm weather down here near the South Coast, I hope you have been able to take advantage of some blue skies too. On the day that Fintel, the parent company of SimplyBiz and Defqto, announced that it has agreed to purchase threesixty from Abrdn, here is a summary of some of the issues that have come into my industry news feeds this week.
Insurance multi-firm review of outcomes monitoring under the Consumer Duty
Teamwork: A Smart way to tackle financial crime
Whistleblowing quarterly data 2024 Q1
FCA regulation round-up June 2024
Insurance multi-firm review of outcomes monitoring under the Consumer Duty
The FCA has published a multi-firm review of outcomes monitoring under the Consumer Duty within the insurance sector. The findings are relevant to firms across the industry.
Under the Consumer Duty firms must regularly assess, test, understand and evidence the outcomes their customers are receiving. The FCA states that without this, it will be impossible for firms to know that they are meeting the requirements set out in the Consumer Duty.
In December 2023, the FCA requested the most recent board and/or committee reporting from 20 larger insurance firms. These included general insurers, life insurers, insurance intermediaries and regulated third-party outsourcers which service insurers.
The review highlights good and poor practice in addressing the four outcomes the Consumer Duty was designed to address. Here are three examples highlighted in the review.
Some approaches were overly focused on processes being completed rather than on outcomes delivered.
Some Board or Committee reporting contained limited insight into actual customer outcomes. This was often because of:
metrics/data not being comprehensive enough
data which lacked analysis and explanation
thresholds/standards in place which did not appear to be appropriately set and/or communicated.
Few firms were able to provide clear evidence of where the monitoring of outcomes had directly led to proactive action being taken to improve these outcomes, where necessary.
Firms are directed to consider the FCA’s expectations of monitoring activities set out in PRIN 2A.9 and benchmark their own compliance monitoring plan against them.
Compliance Matters UK Limited can provide a review of your compliance monitoring plan and support your monitoring activities in assessing your delivery of the Consumer Duty outcomes. To learn more about how Compliance Matters UK Limited can support your firm, click here
Teamwork: A Smart way to tackle financial crime
In a speech by Steve Smart, joint executive director of enforcement and market oversight, he highlighted:
The FCA is as much a law enforcement agency as a regulator
Collaboration and teamwork are key to the FCA’s success – both internally and with our external partners including industry
The FCA is focused on speeding up the pace of its investigations and making the different components of the organisation such as enforcement, supervision and authorisations work together more seamlessly.
The speech goes on to examine how preventing harm is always the ideal outcome and the awareness campaigns the FCA has run. It also touches on how the FCA has worked with the big tech platforms to prevent illegal financial promotions and scam adverts reaching the public domain.
Preventing foreseeable harm is one of the objectives of the Consumer Duty being one of the three rules. Reducing the risk that your firm is used to facilitate financial crime is one of the cornerstones of the AML/CFT regime and your systems and controls should be under regular review.
Compliance Matters UK Limited can provide a review of your AML/CTF systems and controls and to ensure they meet current industry best practice and support your firm’s delivery of the Consumer Duty outcomes. To learn more about how Compliance Matters UK Limited can support your firm, click here
Whistleblowing quarterly data Q1 2024
The FCA has published its whistleblowing data for Q1 2024 which shows the number of new whistleblowing reports received between January and March 2024, and existing reports closed during this time period. Having a robust whistleblowing policy that ensures confidentiality to the whistleblower is an indication of the culture of your firm. It is important that your staff have the confidence to raise examples of non-compliance or wrongdoing at the highest level and that their concerns are investigated without fear or favour.
FCA regulation round-up June 2024
Each month the FCA publishes a regulation round-up in which it summarises activity in the last month and highlights issues for each of the regulated sector. This month, the lead topic is the deadline for producing the first Consumer Duty Board Report which coincides with when Consumer Duty comes into force for closed products and services.
The other 31st July deadline is that firms can begin to use investment labels for UK investment funds seeking to achieve positive sustainability outcomes, if they meet the robust qualifying criteria, as part of the Sustainability Disclosure Requirements (SDR) and investment labels regime. The SDR policy statement PS23/26 covers the requirements and we have covered this is previous Compliance Digests on 1st March, 26th April, and 17th May.
Compliance Matters UK Limited can assist with any of the issues raised in the regulation round-up, particularly meeting the 31st July deadline for the Consumer Duty Board Report.
How can we help?
It is important that you have robust policies and procedures to ensure your firm delivers industry best practice and the four outcomes of the Consumer Duty. If you would like Compliance Matters UK Limited to review your compliance systems and controls, schedule a free, no-obligation consultancy call with us today.
To learn more about how Compliance Matters UK Limited can support your firm, click here.
To learn more about our T&C Support, including access to the Skillcast platform, click here.
Ian Ashleigh
Comentarios