UK Finance urges collaboration on consumer duty

UK Finance has urged regulated financial services firms to collaborate in order to best comply with the Financial Conduct Authority’s (FCA’s) new consumer duty.

The new consumer duty was introduced on 27 July, and requires all financial services firms, including peer-to-peer lenders, to set higher standards and put consumer protection first.

UK Finance has warned that in the absence of a checklist, firms must ensure that they are being compliant, and the best way to do this is to collaborate with other companies.

Read more: FCA chief defends new consumer duty

“One solution in situations like this can be to collaborate with other firms,” said a UK Finance spokesperson.

“Pooling your ideas and working with joint purpose is a route to covering more ground faster and to ensuring that your approach is in line with your peer group. The latter is arguably particularly useful should you be required to defend your position.”

A recent Moneyhub survey found that over 50 per cent of all FCA-regulated firms are not prepared for the new consumer duty.

Read more: P2P sector “better informed” after rule changes

“Most of the consumer duty is a world away,” UK Finance added.

“Much of the compliance side is about identifying situations and deciding in good faith what a decent approach should look like. The core decisions are easy, but then there are the more esoteric ones such as the edge cases and those where customers have a change of circumstances.”

UK Finance is hosting a series of webinars in January 2023 to help firms navigate the new regulatory landscape, and to open up the possibility of collaboration.

Read more: Consumer duty: Four key harms that lenders should avoid