Data Sharing: The Cornerstone of Effective FCA Consumer Duty Compliance

The introduction of the FCA’s Consumer Duty represents a significant milestone in the financial services industry. The Duty compels firms to deliver better outcomes for customers through transparency, accountability, and data-driven decision-making. A key aspect of ensuring compliance with these regulations is effective data sharing between manufacturers, distributors, and intermediaries.

During TURN’s recent on-demand webinar on Consumer Duty, Lisa Laybourn, Director of Policy at TISA, emphasised that data sharing is not a “nice to have,” but a regulatory necessity. The FCA’s guidance (FG 22/5) clearly outlines its expectations:

• Distributors are required to share information with manufacturers to support product reviews and ensure they meet target market needs.
• Firms must provide relevant data, including sales information, cancellations, and regular reviews of distribution arrangements.

As Lisa highlighted, the regulator’s concerns about gaps in data flow date back to December 2023, when the FCA warned: “We expect those concerns to be heightened if the industry does not demonstrate it has made progress.” This statement underscores the importance of continuous improvement in data sharing practices and not viewing compliance as a one-time exercise.

The concept of “not once and done”, as coined by Sheldon Mills in 2023, stresses that firms must adopt a process of ongoing improvement in customer outcomes. For this to happen, firms need robust systems, clear governance, and a collaborative industry-wide approach.

The Role of the Distributor Feedback Template (DFT)

To address these operational challenges, TURN launched Distributor Feedback Template (DFT). The DFT is a game-changer, designed to standardise feedback between distributors and manufacturers. By providing a framework for capturing data on product performance, the DFT helps:

• Ensure manufacturers receive consistent and actionable feedback.
• Improve the design and review of products based on real market insights.
• Align all parties in the distribution chain with the FCA’s expectations for delivering good customer outcomes.

The DFT, along with its guidelines, offers firms an invaluable tool for navigating the complexities of Consumer Duty. Standardising data flow enhances transparency, reduces the risk of regulatory breaches, and ensures firms are well-positioned to meet their obligations effectively.

Why Robust Data Sharing Matters

Data sharing underpins the entire Consumer Duty framework by enabling firms to:

• Understand consumer needs and preferences – This allows firms to design products and services that are tailored to specific target markets.
• Ensure transparency – Firms can track how products perform and ensure that outcomes align with their intended goals.
• Facilitate informed decision-making – With access to clear, accurate data, firms can identify and address risks promptly.

The FCA has made it clear that it will not shy away from enforcement where firms fail to comply. The industry has been given time to adapt, but the regulator’s expectations are clear: firms must cooperate, share information, and demonstrate continuous progress.

In a rapidly evolving regulatory landscape, tools like the Distributor Feedback Template represent a practical and effective solution for firms striving to align with Consumer Duty. By leveraging these tools, firms can ensure compliance while enhancing customer trust and delivering meaningful improvements to outcomes.

If your firm is ready to embrace transparency, improve compliance, and align with the FCA’s Consumer Duty requirements, TURN is here to help. Our Distributor Feedback Template (DFT) and innovative solutions are designed to simplify data sharing, improve governance, and deliver better outcomes for customers.

Get in touch with us today to explore how TURN can support your organisation in navigating Consumer Duty effectively. Contact us to schedule a demo or learn more about our offerings. Together, we can build a better future for financial services.

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