MorganAsh has warned financial services firms they need to strengthen how they evidence outcomes for vulnerable customers as scrutiny of Consumer Duty reporting increases ahead of next month’s board reporting deadline.
The support services provider said recent reviews by the Financial Conduct Authority have identified weaknesses in board reporting across the sector, with too many firms relying on anecdotal evidence rather than robust data to demonstrate whether vulnerable customers are receiving fair outcomes.
MorganAsh said many firms still lack meaningful vulnerability data, making it difficult to identify vulnerable customers, track outcomes and demonstrate compliance with Consumer Duty requirements.
The comments come ahead of an industry webinar hosted by MorganAsh featuring Stephanie Chapman, consumer duty delivery manager at the FCA. The session will focus on what effective reporting looks like in practice, how firms can benchmark themselves against peers and the wider financial services sector, and the action the regulator may take where non-compliance is identified.
Under Consumer Duty rules, boards must review and approve reports at least annually to assess whether firms are delivering good outcomes for retail customers, including vulnerable customers. For most firms, the next reports are due by 31 July 2026. The first reports were required by 31 July 2024, one year after Consumer Duty came into force.
Andrew Gething (pictured), managing director of MorganAsh, said: “Consumer Duty has undoubtedly raised the bar on what firms need to know about their customers and the outcomes they receive – particularly for vulnerable customers.
“Despite intervention from the regulator and tremendous guidance – especially from the likes of the CII – many firms are still struggling to collect customer vulnerability data – let alone convert that into actionable management information.
“This creates two problems: first, it limits the ability of firms to spot issues early, make necessary improvements to products or services and improve outcomes. Secondly, it means the annual reporting required by Consumer Duty is always a scramble and a complete shot in the dark.
“The firms that are doing this well are those with robust systems and processes, generating quality structured data that allows them to evidence progress and demonstrate good outcomes.
“With several hundred people registering for each event, our webinar series has continued to grow from strength to strength – and having the FCA join us for this discussion is great proof of that.
“Having Stephanie’s input will be hugely valuable as it gives firms direct insight into what good looks like, what stands up to scrutiny and importantly, where are firms falling short.”
The webinar is expected to provide firms with practical insight into regulatory expectations as the July reporting deadline approaches and the FCA continues to focus on how firms support vulnerable customers and evidence good outcomes.
