‘Ch-ch-ch-changes’, to quote David Bowie, are the main theme of the FCA’s business plan for 2019/2020. And let’s face it, the cultural change that’s been mentioned has been on the cards for a loooooong time.
If like me you’ve worked in this industry for a while, you can’t help noticing this issue is something of a groundhog day in terms of massive fall outs for consumers happening time after time – mortgage endowments, PPI and LIBOR being prime examples, but also looking at a global scale – the dot.com bubble, the financial crisis in 2008, and, I imagine we’re all eye-balling cryto-currencies with a mixture of morbid curiosity and a growing sense of inevitability.
But, they all share something in common and that’s a cultural element that provides a fertile environment for things to cause harm to consumers. And that’s exactly what the FCA are trying to address in their Business Plan, so that ‘consumers are treated fairly and market integrity is enhanced’.
I have to admit that I felt some incredulity when the FCA announced what it describes as a sweeping cultural change, in terms of having to tell the industry what ‘healthy culture’ looks like. It still surprises me that firms in this industry need to be informed ‘what a healthy culture looks like’ or to ‘understand its benefits’ or need to be told about taking ‘proactive steps to change any ineffective cultures in their organisations’…really? Surely, it’s not difficult to know that consumers should be treated right, in any context – be that a financial transaction, a customer service exchange or a complaint.
And, lessons can be picked up easily here, because what are the FCA benchmarking for their ‘healthy culture’ markers? Upheld complaints and the levels of redress, as well as feedback from consumers. This isn’t rocket science and it’s not really new news either. It’s all been there for years, and I can’t help feeling that the Ombudsman has been banging this drum for a while now. And why? Because it’s all written in black and white, in the Dispute Resolution rules stating that businesses should learn from the Financial Ombudsman Service’s decisions. I’m not saying they always get it right, but if a pattern forms, that needs attention.
And one of the more recent patterns is vulnerability. This has been a hot topic for a while now and so it’s about time that the FCA show businesses what they mean by vulnerable consumers. It’s just not right that businesses and the vulnerable people themselves have been overlooked or simply left struggling with the issues.
When I worked on the technical desk, we would take a significant number of calls from businesses that were lost in terms of what makes a consumer vulnerable and it’s hard to define. Even the Ombudsman acknowledges this in its latest annual review, where it demonstrated the various ways people can become financially vulnerable – either on a short term of long term basis.
I accept it can be very difficult to put in place a procedure that will provide a fail safe way of dealing with vulnerabilities, but the FCA providing some clarity about its expectations of firms can only be a positive thing. As it can only help with the number of complaints that are referred to the Ombudsman and upheld in terms of businesses not grasping the vulnerability issue sufficiently to be able to resolve it without their help.
Which brings me back to the evidence that the FCA are looking to use in terms of benchmarking the ‘cultural changes’ they want to make to the industry. The measures they have chosen mean looking to show evidence of a business’ own healthy culture, which comes back to good customer service and learning how to deal with complaints when they happen.
Because, there are no guarantees and complaints do happen – no-one is made of Teflon, but if the FCA is benchmarking this data, then it’s time to get savvy and make sure you’re doing all you can to resolve them to the best of your ability, using the knowledge you glean from the Ombudsman Service and getting some training that can help you get ahead of the pack on this.
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