Speaking at a conference hosted by the FSA and British Bankers’ Association (BBA), the FSA's Director of Major Retail Groups, Oliver Page, gave feedback on progress being made to ensure delivery of fair treatment, but also drove home the message that firms had more to do to deliver the TCF principle.
Oliver Page said: "The FSA is encouraged by the early signs we see of TCF progress at firms, but there is still a long way to go before we reach our goal, which is to persuade the senior managements of all firms to accept their responsibility for their firm's delivery of these principles. This will be done by management taking the lead in their firms, ensuring they drive their organisation to think through how to ensure TCF is built consistently into the operating model and culture of all aspects of the business to produce fairer outcomes for customers.
"At this stage, we do not expect to find all firms having fully embedded TCF throughout their business, but we would expect to find that they have started to analyse how they will ensure it is delivered and over what period. So far, we have mainly focussed on larger firms, but our focus is widening to encompass smaller firms and businesses and will widen further over time."
Following the publication of the TCF progress report last year, the FSA wrote to the chief executives of 35 major retail groups asking for them to use the publication as a guide to assessing their delivery of TCF. The overall response has been encouraging. The FSA found that firms have been most successful where they have linked their TCF programmes to wider strategic changes in the organisation. Other firms have successfully linked their TCF programmes to reviews of their corporate brand and corporate values. As a next step, the regulator will write to the next tier of the largest retail firms.
The FSA recognises the issues for a major bank are different to those facing a small mortgage or financial adviser. The regulator's TCF consultative group of firm and consumer representatives will consider the issues for small firms and how the TCF agenda for them can be best delivered effectively.
To help the industry, the FSA has also undertaken, in March, to publish a range of information on its website, including an industry case study, which will provide firms with practical examples of how the TCF principles can be implemented.
Oliver Page also repeated the FSA's commitment to introducing regulation only where market-led solutions for market failures could not be found. He said: "The FSA has rules relating to TCF, and we could deal with the shortfalls in the implementation of the TCF principle by adding yet more detailed rules, but we do not see that as the best outcome for firms or for consumers. The success of a solution based on the TCF principle, which makes clear the requirement to treat customers fairly but allows firms the flexibility they need to deliver it, depends on firms taking the action needed to ensure that the principle of fair treatment of customers is a reality."
