FCA CEO Nikhil Rathi has said the FCA will take a ‘pragmatic’ approach to enforcing its new Consumer Duty.
He said that whilst the regulator will tackle breaches that pose the greatest risk of harm it will look “favourably” on firms that have made “reasonable efforts” to address concerns.
Mr Rathi said: “We’re not setting out to trip firms up by going after technical breaches. We look favourably on firms taking reasonable steps to identify and proactively address concerns, even if mistakes are made.
“We want to be pragmatic, so have focused on the greatest harms – cash savings markets, both in the largest banks and on platforms, insurance products such as premium finance and GAP insurance. We have telegraphed these publicly over the last two years, so there should be no surprises.”
This contrasts sharply to previous comments issued by the regulator about Consumer Duty enforcement.
In a speech to Morgan Stanley’s European Financials Conference this morning Mr Rathi added that he believes the Duty will mean “fewer detailed or reactive rules”.
He said: “If firms get it right, analysts will spend less time talking about provisions for redressing issues of the past. That, over time, should reduce the Financial Services Compensation Scheme levy, which has already started to stabilise.”
When it comes to historic redress for consumers, Mr Rathi said the FCA is “working hard” and will set out next steps by the end of September.
