FCA Warns Banks on Customer Communications
The COVID-19 crisis has created numerous challenges for the financial sector, but one which often goes unseen is the logistical challenge of maintaining communication with customers. With lockdown in place it is difficult for banks to maintain the speed and efficiency of paper based communications. However, the FCA has reminded the sector of its obligation to do everything it can to comply with communication obligations.
Back in March, the regulator warned financial advice companies not to work in the office, and to avoid face to face contact with clients. Alternative arrangements were to be made online, but this left a gaping hole for those customers who, for one reason or another, were unable to access online services. Maintaining a business as usual service for these clients is proving to be a major problem.
In its recent guidance, the FCA is keen to ensure that despite these problems, offline clients are protected as much as possible.
Notifying the FCA of issues
While the regulator still expects firms to try and comply with paper-based requirements, it acknowledges this may not be possible in every case. There will be flexibility with timescales and they will be more understanding. However, they do expect firms to demonstrate what steps they have taken to minimise the impact as far as possible and to notify them of any problems they expect to encounter by emailing firm.queries@fca.org.uk
For example, a firm would need to collect and send out paper documents as often as possible ensuring that while the service might be slower than normal, offline customers do not miss out. Funds should be returned to clients as quickly as possible if a delay means they cannot proceed with the transaction.
Clear communication
At times of uncertainty, transparency becomes even more important than usual. Firms will be required to provide regular updates about how they intend to treat incoming and outgoing post. Customers should be updated on evolving market conditions and shown how they can check their statements if they arrive late.
Face to face alternatives
Face to face meetings for issues such as suitability assessments may not always be possible. However, the FCA has urged companies to investigate alternative options such as phone conversations or online due diligence checks. Firms should send out the results of any assessment either online or through other means.
The FCA has experienced plenty of problems of its own. Back in April, it admitted it could be many months before it is able to address its key regulatory priorities. It is making its own adjustments and has said it may have to redraw its business plan to take into account the evolving situation.
Maintaining business continuity is an issue for all businesses. While online technology, makes it possible to deliver more services remotely, it is the small minority who can’t access the internet who are at risk of being disadvantaged. Inevitably, these people are more likely to be older or more vulnerable and will be even more adversely affected by delays to their services. The FCA, then, is striking a balance between being understanding for customers but keeping up the pressure to protect those clients who may suffer.
To speak to us or subscribe to our newsletter please contact us here.
Or message us via the chat icon in the bottom right corner of your screen.
