18 Financial Conduct Authority
Key activities for 2014/15
Putting consumers at the heart of what we do
We use consumer and market insights to improve
outcomes for consumers. This means building
relationships with consumer organisations, looking for
trends in rms, products and sales, and analysing market
research and behavioural economics data to inform our
policy-making and regulation.
We will be clear, consistent and constructive in our
communications, engaging directly with consumers
when required. We will draw information from a wide
variety of external stakeholders, including consumer
bodies and complaints, to capture emerging consumer
issues and implement changes in our business in the
interest of consumers, the advice sector and the rms
we regulate.
In 2014/15 we will use our new retail consumer
spotlight segmentation model, which identies and
segments most of the UK population based on their
nancial attitudes. We can use this to identify potential
problems in nancial promotions and take informed and
proportionate action to prevent harm to consumers.
We will also use it to ensure our communications are
targeted and relevant to the consumer. We will make
our model available for rms, consumers and other
external stakeholders to engage with.
We will speak directly to consumers through our
consumer helpline. This engagement will increase
signicantly when we begin taking calls for consumer
credit. We have also begun changing the way people
can contact us so we can reach them appropriately,
such as through web-chat or social media.
We will carry out work to determine whether the
relationship between our Handbook and rms’
perceptions of it works in the interest of consumers.
This ‘expectations gap’ work will consider, for example,
whether the understanding of rules around non-
advised and advised sales encourages internet-based
sales and whether disclosures can be made more simple
and work better for consumers.
Guarding the gateway to the nancial markets
through authorisation
We monitor the gateway to the nancial markets by
assessing rms as they apply to us to be authorised. We
use all the relevant information available to us to gain a
thorough understanding of their internal culture, their
business models and the way they treat their customers.
A key part of this is ensuring that certain individuals
are accountable for the behaviour of the rm, placing
the onus on them to ensure good conduct. We analyse
how much risk a rm may pose to our objectives and
prioritise our resources where we see potential or actual
harm being caused to consumers or markets.
We do this to prevent rms from entering the market
that we believe may pose a signicant risk to consumers
or to the market itself through poor behaviour. Before
we allow them to do business, they must address our
concerns and we must be condent they have the right
leadership and good practices in place to provide value
and good outcomes for their customers. By assessing
rms as they set up their business, we can ensure they
embed a culture of putting customers at the heart of
their business from the beginning.
In 2014/15 we will continue to embed a conduct
assessment into our authorisations process, which
includes ensuring that rms meet our threshold
condition for business models. We will also improve our
processes by using our new INTACT system to deliver
an effective and robust platform to collect rm and
consumer intelligence.
We will continue to focus on enhancing individual
accountability in rms and we expect to make changes
to our approved persons regime for both deposit-taking
institutions and nancial services rms more generally
to further strengthen our process.
From 1 April 2014 all consumer credit rms that transfer
into our regime from the Ofce of Fair Trading will be
subject to our rules and principles for businesses to
ensure they will meet our standards for this sector.
Driving a consumer-focused culture in rms
through supervision
We use supervision to make sure that good outcomes
for consumers are at the heart of a rm’s business. We
take an informed, forward-looking, evidence-based
approach to identify the most urgent and important
current and emerging risks in the nancial markets. It
is through this that we maintain a clear understanding
of rms’ business models, strategy, culture, products,
operations, governance and prudential health.
Our overall approach is to engage with rms to conduct
proactive rm supervision, working with them where
we consider that change is necessary. We also look