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Treating Customers Fairly (TCF)

Dividends from TCF?

While the deadline for Treating Customers Fairly (TCF) has now passed, TCF should continue to be an important area of focus to ensure dividends are paid from the efforts that have been made to improving outcomes for consumers.

It has been made clear that conduct risks continue to remain a strong focus and a high priority within its Retail Strategy, with the FSA stating that TCF is to be an, ‘enduring feature of the regulatory regime’ . This is supported by the FSA’s commitment to fully embed outcome focused regulation within its supervisory processes in 2009/10, with the support of its dedicated Retail Conduct Risk Division. For some, despite the deadline passing, there is ongoing effort to ensure TCF has been fully embedded throughout the organisation and evidence gathered to demonstrate improved consumer outcomes are being delivered.

Customer retention and attraction

It has become evident that TCF has become ever more important in light of the current economic environment with a reduction in consumer spending and greater scrutiny by consumers in ensuring that they get value for money from their choice of financial services and products, not only in terms of cost, but in terms quality of service and overall customer experience which will include fairness factors.
Those firms able to deliver on this to both existing and new consumers are likely to perform better in these more challenging times as improved outcomes for consumers leads to greater customer loyalty and retention and attracts new customers.

So how can a fully embedded TCF approach pay dividends?

  • Direct and indirect customer risks are fully integrated into the risk management framework for the organisation ensuring an appropriate level of mitigating controls across all levels of the business.
  • Management information enables senior management to track and monitor relevant customer risk areas with senior management taking early action in dealing with root causes and remedying any customer detriment where deficiencies are found;
  • All staff are engaged and fully understand what TCF means to the business and their role in delivering the right outcomes first time and responding to customer needs when most important;
  • Key decisions across the organisation provide an appropriate balance between commercial and customer impacts, ensuring products and services continue to respond to the needs of target markets;
  • A less intrusive approach being adopted by FSA in its supervision of conduct risks (the regulatory dividend) if a firm can demonstrate to FSA either as part of its ARROW assessment or other thematic work that TCF is fully embedded.

The Deloitte approach to TCF

Deloitte has an experienced team of professionals who have been supporting a range of financial services organisations over the years on many different aspects of TCF.

Our flexible, independent and objective approach can support you to:

  • Review your strategy to ensure this appropriately takes into account TCF;
  • Identify and manage key customer risk areas;
  • Develop or validate robust governance and controls including MI for monitoring ongoing TCF delivery and customer and firm outcomes;
  • Implement changes arising from identified areas of weakness;
  • Identify and capitalise on opportunities to improve the way that you interact with your customers; and
  • Prepare for FSA ARROW supervisory

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