Consumer Protection is delivered through suitable products, services, and fair value within well-functioning markets. The application of high standards of conduct from firms and individuals aims to increase confidence in the financial services industry and promote future strength, growth, competition, and investment.
Alongside the regulatory regime, there is a desire to be more sustainable and eco-friendly to tackle climate change and its associated impacts. In addition, the financial industry must support cultural and strategic outcomes to enable such essential change. Moreover, the world finds itself at a pivotal moment in the climate emergency, with financial services required to accept their significant role in the current crisis and what will be expected in fighting climate change.
The ability to move at pace, and an adeptness in navigating major outcomes and initiatives could prove to be game changing for firms and a key differentiator in future growth potential.
Consumers are facing extreme challenges and vulnerability is increasingly likely, particularly with rising costs. These terms are not new, but the depth of embeddedness still varies considerably across firms and sectors and it’s vital that firms can not only verbalise, but also deliver. They need to proceduralise and put into practice adequate and reasonable control and processes that assess, monitor, and deliver tangible customer protection, support, and flexibility. This will cover areas like suitability, fair value and consumer protection – primary disciplines across all areas of the customer journey.
As economic outcomes and cost of living pressures continue, consumers will be increasingly impacted and the industry will face greater need for management of areas that focus on for example; Financial Crime and Market Abuse impacts and disruptions.
As technology evolves, with impact comes opportunity – firms need to identify and adapt to ongoing security, culture, and governance threats, but having a flexible technology solution gives firms the ability to adapt with dynamic pace and offers a best of breed approach to market leading solutions.
Many consumers don’t know what good looks like and make decisions based on what seems safe. That often means they settle for what they already have or unknowingly take on more risk than they realise. More consumers are vulnerable, or at risk of becoming vulnerable, because of the effects of the pandemic and rising costs of living. Firms must understand the needs of vulnerable consumers. When they don’t, consumers are sold products that aren’t right for them and don’t offer fair value.
*Source FCA business plan 2022 – 2025
Diversity and inclusion are also central to delivering financial services for future generations. Firms embracing holistic cultural diversity and inclusion, should ensure development of the products, services, support, and protection continues in an all-encompassing way. Transparency, with the ability to drive change and support diversity while adopting measures that deliver flexible but inclusive practices can only be positive for the entire industry, and more importantly, your customers.
Personal accountability is also very important – your people are critical in delivering to your standards, ethics, and clear lines of sight. Thresholds and accountability are crucial to get in place and functioning to a high standard of effectiveness, with the transparency to ensure escalation and decisions can be made in reasonable succession as parameters change and evolve. From Board and Executives through to Management and Associates – standards of conduct and responsibilities should be clear, defined, embedded, and monitored – with supporting solutions that enable your people to excel and drive good customer outcomes.
Digital is undoubtedly shaping the future and industry practices will continue to evolve at pace, regulators will continue to drive positive change, and firms and markets will continue to innovate and drive standards. Staying within the parameters of a well-functioning market and protecting our customers is paramount and will continue to evolve and raise the bar in perpetuity.
The old adage of ‘prevention is better than cure’ could not be more relevant today in financial services. ‘Higher Standards’ is not an aim, it should be fundamental – we as an industry should be acting now to future proof our businesses and lead the way, trailblazing automated control, risk mitigation, consumer protection, fair value, and suitability and support readily the drive towards positive environmental, social, and governance priorities. Let’s take this as seriously as we do our P&L and accept no less than exceptional as our aim.
Grath understands the need to run a well-functioning and profitable business model, that also is a key component of confidence in the industry. However, there are false economies and heightened risks in deploying highly manual operating models and impacts for scalability and ability to adapt and change to rising industry standards in doing so. Your people are highly skilled and invaluable assets, but adding hours to the day is not the best way to drive capacity – sustain a positive culture, drive automation and efficiencies, eradicate manual and unfit practices, and add resilience to your business model.
In our opinion, good is correlated to resilient control and automation which helps to support firms and customers to decisions, oversight, and prompt actions. Dynamic and robust solutions focus on all aspects of compliance and governance, driving enhancements and good outcomes at a firm and a consumer level.
Accelerating in a rapidly changing economic world, with the pace that will be needed, is highly likely to only be achieved to the optimum level with innovation, automation, and control in sync.
Let Grath assist you to drive your GRC control blueprint and future proof your business for the long term.
If you’d like to know how Grath’s technology can help you meet an uncertain future with confidence, then we’d love to talk.
Get in touch with us at grath.com/contact