From ‘light touch’ to Consumer Duty
After years of debate and in response to a succession of scandals, the United Kingdom has adopted a much more prescriptive approach to protecting financial services consumers. Scrutiny will fall not only on firms but also on the regulator to make a success of these reforms, writes Esther Martin.
Esther Martin, editor
Just two decades ago, the UK financial services industry basked in the less fettered era of ‘light touch’ regulation. Now,
compliance officers are combing through hundreds of pages of final rules and guidance for the new Consumer Duty published
on 27 July.  The package comprises an overarching Consumer Principle that requires firms to act to deliver good outcomes
for retail customers; ‘cross-cutting rules’ for greater clarity on expectations under the Principle and the desired outcomes;
along with rules relating to the four key outcomes of (1) products and services, (2) price and value, (3) consumer understanding,
and (4) consumer support. “As well as acting to deliver good customer outcomes, firms will need to understand and evidence
whether those outcomes are being met,” says the Financial Conduct Authority.
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