MorganAsh is urging financial services firms to strengthen how they evidence outcomes for vulnerable customers, as regulatory scrutiny of Consumer Duty board reports intensifies ahead of July’s reporting deadline.
Recent reviews by the FCA have highlighted significant weaknesses in board reporting across the sector, with too many firms relying on anecdotal evidence rather than having robust data to demonstrate whether vulnerable customer groups are receiving fair and equitable outcomes.
MorganAsh argues that the issue stems from a lack of meaningful customer vulnerability data, leaving firms unable to identify their vulnerable customers, let alone track outcomes, understand patterns and support needs or evidence compliance under Consumer Duty.
For most firms, the next board report is due by 31st July, in line with the FCA’s requirement that boards review and approve reports at least annually to assess whether the firm is delivering good outcomes for retail customers – including vulnerable customers.
Andrew Gething, managing director of MorganAsh, said: “Consumer Duty has undoubtedly raised the bar on what firms need to know about their customers and the outcomes they receive – particularly for vulnerable customers. Despite intervention from the regulator and tremendous guidance – especially from the likes of the CII – many firms are still struggling to collect customer vulnerability data – let alone convert that into actionable management information.
“This creates two problems: first, it limits the ability of firms to spot issues early, make necessary improvements to products or services and improve outcomes. Secondly, it means the annual reporting required by Consumer Duty is always a scramble and a complete shot in the dark. The firms that are doing this well are those with robust systems and processes, generating quality structured data that allows them to evidence progress and demonstrate good outcomes.”
