COVID-19: Act in haste, absolutely - but don’t repent at leisure!
05 May 2020
I started work the same year the Financial Services Act was introduced, 1986. I’ve helped firms deal with the various reincarnations of conduct regulators from the ‘originals’ in 1988, like LAUTRO and FIMBRA, to the present FCA.
Whilst 2008, and the financial crisis, of course tested regulators and firms alike, never before have those with a primary focus on customer protection had to deal with such extraordinary times, as those brought about by Covid-19.
The lengthy FCA consultation periods, to which we have become accustomed, have been turned on their head in just a few short weeks. And quite right too.
Money consistently features in people’s top three worries. And vulnerable customer numbers will be rising significantly in the current climate.
So focus at the current time must be on helping customers cope with potentially life changing impacts on their personal finances.
Impressive industry response
The early signs demonstrate that an industry all too often the kicking ball of the press and public opinion has reacted incredibly well.
While having to negotiate extreme operational and, for many, financial challenges of their own, customers have clearly been at the heart of firms’ responses in recent weeks. The FCA’s temporary measures have been taken onboard rapidly. Conversations I’ve been having with clients and contact I’ve had from the firms I use for my own personal finances reveal an industry doing all it can to help its customers.
But, rapid change brings with it increased risk. The changes currently being made have had minimal time to be tested or thought through in detail. The mostly positive press of an industry doing all it can to help customers could easily turn should these well-intentioned actions end up causing issues further down the tracks.
The consequences of rapid change need early consideration
In the immediacy of the FCA announcements, actions have quite rightly been taken quickly to try to assist customers, particularly those who would be viewed as vulnerable. Now, however, must also be the time to take stock of how your firm reacted and whether in doing so it achieved your aims and those of the FCA.
In making changes so quickly, are you confident your firm has reacted as effectively and robustly as it could have?
Can you be sure that whilst doing everything with good intentions you haven’t unintentionally overlooked some of the actions you needed to take or created potential customer outcome issues which will only surface in the medium to long term?
History shows, unfortunately, that time forgets. Public opinion can quickly change if in a few months’ time it becomes apparent changes made in haste have actually resulted in some inadvertent poor outcomes. And of course there are organisations out there only too keen to pounce on any potential customer harm issues.
So don’t let all the good work disappear in a few months’ time. Take action to look at what you have done through a holistic lens. Challenge your responses now not later. Be confident the speed at which you had to act won’t result in problems in the future.