Just as you thought you might not hear from the FCA for the rest of the summer, they go and publish the latest in their Consumer Duty good practice publications...this time focused on 'Outcomes Monitoring'.
It presents a very detailed picture of the work they have been undertaking to review firms' outcomes monitoring practices. Rather than just regurgitate the findings in full, I have picked out a few of the points that caught my eye and are worth considering further.
MI
There is a clear emphasis on not only tracking the right metrics to measure outcomes but when actions are taken to address poor outcomes, firms need to evidence that they have checked those actions taken have led to the intended improvements.
It sounds obvious but this is the challenge the FCA is setting - be clear on the outcomes your actions are intending to deliver and then ensure your MI evolves to ensure you can track and evidence those improvements.
Vulnerability
There is an expectation that vulnerability outcome monitoring should not be aggregated and should instead track outcomes for different vulnerabilities e.g. health or life events. There is nothing new in the FCA revealing the importance they place on outcomes for vulnerable clients but it shows the granularity expected and that simply ticking a box to say you have some general vulnerability MI on your dashboard will be challenged.
Indicators
A reliance on lagging indicators can often mean firms are not able to anticipate harm but instead, only react to harm caused. Although a small point within the wider review, I think it was really useful for the FCA to re-emphasise this point, as firms can often get caught up scrambling around to ensure MI is focused solely on the outcome but not the circumstances that could arise that could lead to that outcome.
In my past experience with firms, this is where structured approaches to identifying foreseeable harm and outcomes monitoring through customer journey mapping and product design processes really help build a picture of harm and poor outcomes from the bottom up, rather than only relying on tweaking current MI to fit the supposed brief.
Evidence
If in doubt, evidence it. Whether it is evidencing good governance, challenge, the setting of thresholds, your culture, the FCA wants to see a demonstrable picture of how and why your outcomes monitoring framework is doing what it says it should.
Whilst the concept of demonstrating what you do when asked by the regulator is hardly ground-breaking, the granularity of evidence put forward via the good practice points shows that a really structured and well-thought through approach to building that picture is essential to meeting that standard.