Consumer Duty rules OK: Why compliance with the new FCA requirements is a golden opportunity when combined with QA and testing

30 Jun 2023

This month’s author:  Daniel Dore, CEO of Assured Thought

The Financial Conduct Authority's new Consumer Duty rules come into force in July 2023. In this month’s blog, Daniel Dore gives his expert take on QA and testing’s critical role in your company’s compliance with the new rules – and explains how, as you’re using it, you could use it to do much more.

Regulatory changes in the financial world often spark seismic shifts, so it’s no surprise that the Financial Conduct Authority sent ripples through the industry when it released its Consumer Duty Implementation Plans report on the 25th of January 2023.

But these new regulations – which come into force on the 31st of July 2023 – won’t just reshape the financial landscape for wealth and asset management companies. They’ll reshape it for consumers too – by demanding that those companies put the interests of their customers first. The new rules focus on four key outcomes: fair value, consumer understanding, products and services, and consumer support. They necessitate the provision of services that are fair, comprehensible, and responsive to the needs of consumers. 

To meet those new expectations, your company will need to do much more than just tick regulatory boxes: you’ll need to make strategic improvements to enhance customers’ experiences, placing them at the heart of all operations to ensure clear communication, fair pricing and high-quality customer service. To make all that a reality, there's one factor that’ll be more crucial to engage with than any other: quality assurance and testing.

But there’s more than one way to go about QA and testing. Re-evaluating and updating your company’s QA and testing approaches could reap rewards far beyond basic compliance with the new rules. Practices like AI-driven testing methodologies and proactive data analytics don’t just help companies like yours to navigate regulatory changes – used correctly, they’re also catalysts for customer-centric growth and innovation. 

And that’s the beauty of this situation: by truly embracing rigorous, advanced QA and testing, your company can ensure an effective, customer-centric transformation – with real potential for strategic advantages over those companies that commit the bare minimum of QA and testing resources necessary to comply. 

As a QA and testing specialist, I can tell you it's a critical and often underestimated part of any significant business transformation. QA and testing ensure changes are implemented correctly, potential issues are identified early, and end results align with the relevant vision and meet customer needs. 

In the context of regulatory change, this means making sure that new processes, products, and services not only meet new regulatory requirements but also enhance customer experiences. The new Consumer Duty rules are certainly no exception.

Leveraging QA and testing in digital transformation 

The FCA's new rules are designed to push consumer-centric operations, but they also provide an impetus for digital transformation. With the landscape changing, wealth and asset management firms have a golden opportunity to leverage digital technologies to enhance their products and services, making them more responsive to customer needs and expectations than their competitors. It’s an opportunity well worth seizing. 

However, successful digital transformation isn't as simple as just adopting new technologies. It involves a fundamental reshaping of business processes and strategies – and that’s where a robust QA and testing strategy proves invaluable. By ensuring digital solutions not only meet the business requirements of your company but also deliver a seamless and efficient user experience to your customers, you can navigate your digital transformation journey with confidence.

Turning regulatory compliance into a competitive advantage

Perhaps your company views QA and testing as nothing but a regulatory hurdle,  but it’s actually a strategic enabler. By integrating QA and testing processes into digital transformation initiatives, you can ensure new solutions are not only compliant with the new Consumer Duty rules but also provide superior customer experiences. 

A strong QA and testing strategy can also provide valuable insights into customer behaviours and preferences, informing continuous improvement efforts that lead to better products and services, increased customer satisfaction and, ultimately, a competitive edge in the financial market. 

Remember: the future is not just about meeting regulatory requirements – it's also about exceeding customer expectations. QA and testing are the guides you’ll need on that journey.

 Step up your QA and testing game 

With the FCA's new rules coming into force this month, wealth and asset management firms need to put QA and testing at the forefront of their implementation plans. It's crucial that your tests are thorough, comprehensive, and targeted towards not only meeting regulatory requirements but also enhancing customer experience. 

It’s also essential to remember that quality assurance is not a one-time process. It's an ongoing effort that needs to be consistently applied and updated in line with the evolving digital landscape and customer expectations.

 The power of technology in QA and testing 

Today, technology is a boon to QA and testing. Automated testing tools can streamline and speed up the testing process, while AI and machine learning can be leveraged to predict and prevent potential issues before they occur. Similarly, data analytics tools can provide valuable insights into customer behaviours, preferences and pain points to inform the continual improvement of products and services. 

By harnessing these technologies, your wealth and asset management company can significantly enhance its QA and testing efforts, paving the way far beyond successful compliance with the new Consumer Duty rules.

 A future of customer-centric wealth and asset management 

The FCA's new Consumer Duty rules certainly mark a significant shift towards a more consumer-centric financial industry. For some wealth and asset management firms, these changes might seem daunting. But for those with a strategic approach to QA and testing, they will represent an opportunity for a truly customer-centric transformation. 

The journey to compliance will certainly present challenges – but every challenge is an opportunity in disguise. With a robust QA and testing strategy in place, your company can turn the FCA's new Consumer Duty rules into a catalyst for growth, innovation and enhanced customer service. 

As we navigate this regulatory sea change, we must remember that the factor at the heart of it all is the customer. A more customer-focused approach, enabled by rigorous QA and testing, will not only lead to regulatory compliance but also, more importantly, a stronger bond with customers. 

It’s these customer connections that will shape the future of wealth and asset management.


For more expert advice from Assured Thought, the QA and testing provider of the financial services industry, click here:

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