Some smaller regulated firms have found limitations in the range of data they can access when it comes to monitoring and tracking outcomes under the Consumer Duty, according to a new report from the FCA.
The report calls on small firms to turn to external data sources, such as the Financial Ombudsman Service and trade bodies, in order to draw insights.
The report said: “Smaller firms may find they are more limited in the range of MI they can access. Where proportionate, they should look for opportunities to draw insights from external data sources, including the Financial Ombudsman Service as well as insight from relevant trade bodies.
“Firms can also use qualitative feedback, such as observations from frontline staff, customer surveys or interviews, and complaints. This can help fill gaps where data is limited, though an absence of complaints can be an indicator itself, and should not be relied upon solely as evidence that outcomes are being met.
“Smaller firms may also consider working with trade bodies. This could include benchmarking or anonymised data sharing to help identify wider trends.”
The report added that smaller firms can check they are meeting the Consumer Duty by building feedback into their interactions with customers.
However, it was not just smaller firms that were struggling with the quality of the data needed to prove they were meeting Consumer Duty requirements.
While larger firms have access to more data, some firms analysed for the report did not share enough high quality data.
The FCA report said: “Some firms did not have sufficient data quality to justify conclusions or to give governing bodies adequate assurance that firms are meeting their obligations under the Duty. Some also did not accompany their MI with adequate explanations to clearly illustrate it constitutes evidence of good outcomes for customers.”
The report added that some action plans did not provide enough clarity on the data that would be used to evidence good outcomes.
• The FCA reviewed Consumer Duty reports from 180 firms from across the retail banking, wholesale, insurance, payments, consumer investments and consumer finance sectors. The sample included a range of small, medium and large firms with a range of business models.