The FCA’s new Consumer Duty principle promotes higher and clearer standards of consumer protection across financial services and comes into force on 31 July 2023.
We spoke to Ollie Wright, Head of the Financial Institutions Team at Estatesearch to find out the implications for legal firms and how Estatesearch is working with organisations to help them deliver good outcomes for retail customers.
- How will the new Consumer Duty principle affect legal firms?
The FCA’s new Consumer Duty principle which comes into effect on 31 July 2023, will require organisations to consider the firm-consumer relationship with the goal of protecting consumers better.
It applies to any firm authorised under the Financial Services and Markets Act 2000 (FSMA), the Payment Services Regulations 2017 (PSRs) and E-money Regulations 2011 (EMRs), in relation to products and services for prospective and existing retail customers.
The new Consumer Principle states: “a firm must act to deliver good outcomes for retail customers” and requires firms to: act in good faith, avoid foreseeable harm, and enable and support retail customers to pursue their financial objectives. This should be applied in relation to: products and services, price and value, consumer understanding and consumer support.
- How does Estatesearch support legal firms in relation to Consumer Duty?
As a legal technology company for private client practitioners working on bereavement and loss of mental capacity cases, and one of the founders of the Vulnerable Banking Group, we want to support organisations in meeting this principle. We work closely with the financial industry to develop processes and technology that promotes best practice, particularly for those that are working on behalf of customers that could be considered vulnerable. Our goal is to design, build and develop innovative technology led services which support the delivery of legal services in private client sector and ultimately ensure that vulnerable people are treated fairly.
It has been estimated that there are £200 billion in unclaimed assets in the UK. Our award-winning Financial Profile Search gives executors, beneficiaries, deputies and attorneys peace of mind through comprehensive, efficient and demonstrable due diligence that mitigates risk and cost of missed assets or liabilities.
In order to compile our report, we send hundreds of thousands of profile enquiries to financial institutions on a monthly basis. To make this process more manageable, we have now developed an automated tool which allows firms to streamline how they deal with our enquiries. Data held by financial institutions can now be analysed more efficiently, allowing them to confirm if they hold financial profiles for deceased or vulnerable individuals and to reply to personal representatives far more quickly than previously possible. This development will now help financial firms to comply with Consumer Duty and improve outcomes for vulnerable people.
- How does the solution work?
Through the process of developing our Financial Profile Service, we formed relationships with almost 200 banks and financial institutions in the UK.
The service is essentially a search of the financial industry to better understand a data subject’s connection to one or more financial firms, i.e. whether there is a Profile match. Typically, one of our Premium Profile Searches will require notification of over 190 banks, building societies, share registrars, pension providers, investment providers and insurers to help personal representatives locate live, online, lost and dormant accounts. Currently, many financial institutions need to search multiple databases to respond to each request. Even via email, requests can take around 14 days.
Our new tool or Application Program Interface (API) removes the burden of data handling for financial institutions, allowing the individual institutions to filter their own data by relevance to the request and see very quickly where any further investigation is required.
The results are then returned to our secure, online portal, typically within 24 hours. This reduces the resources needed by banks to respond to requests and benefits representatives trying to identify and locate financial profiles of a deceased or vulnerable person’s estate, at what can be a difficult time.
- How is Estatesearch delivering the new API?
We have already delivered the API to two major high street banks, allowing them to implement the automation tool into their own databases and cut weeks off the administration time of profile searching.
As an organisation we are always happy to work with financial institutions to see how we can make requests for information less onerous and speed up the process for the benefit of vulnerable clients, helping them comply with the new Consumer Duty principle.
For further information please see: For further information please visit: https://www.estatesearch.co.uk/new-industry-insights/supporting-consumer-duty/
This article was submitted to be published by Estatesearch as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.
