The issue front and centre of the Financial Conduct Authority’s (FCA) 2022 Annual Public Meeting was the cost of living crisis. At that meeting Richard Lloyd, the interim Chair of the FCA, explained that the FCA’s primary focus was to ensure that it does “all it can to help people with the cost of living crisis” and that firms in the retail financial services sector should step up and do all they can to help customers. Our article provides an overview of the key themes on the FCA's agenda.
As with the Covid-19 pandemic, the FCA is taking an active role to protect consumers during the cost of living crisis. The FCA has already been focused on protecting vulnerable customers for a number of years and has been trying to ensure that firms do the same. In the current climate, it is likely that even more customers will be considered by the FCA to be vulnerable. Given that the cost of living crisis is likely to continue and as the UK’s economy enters a downturn, this is likely to remain a keen focus for the FCA and it is critical that firms act now to ensure that vulnerable customers achieve good outcomes.
The FCA’s focus on good customer outcomes is demonstrated by its new Consumer Principle, which underpins the anticipated Consumer Duty and which requires firms to deliver good outcomes for retail customers. The FCA now wants firms to concentrate on good customer outcomes as much as their bottom line.
In our article, we consider five key items on the FCA’s consumer agenda: (1) the Consumer Duty; (2) vulnerable customers; (3) protecting borrowers; (4) financial crime; and (5) financial promotions. These are all critical risk areas that retail financial services firms should be focused on as the cost of living crisis and the economic downturn continue.