Question
To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of the Consumer Duty on people (a) with and (b) without access to mainstream financial products.
Answer
The Consumer Duty is an important part of the wider framework supporting financial inclusion. It requires regulated firms to act to deliver good outcomes for retail consumers, including by ensuring that products and services meet the needs of their target customers, provide fair value, and are supported by communications that consumers can understand For people with access to products, the Duty helps ensure that firms identify where groups of consumers are experiencing poorer outcomes and take appropriate action to address this. The Duty applies across the customer journey, including the application process, and its focus on good outcomes can help reduce barriers to accessing and using financial services The Consumer Duty does not require firms to provide products or services to every consumer, and the Financial Conduct Authority (FCA) cannot, on its own, address all the causes of financial exclusion. That is why it is important for the Government to coordinate efforts across industry, civil society, and the regulator to tackle the barriers to financial inclusion and help people access the financial products and services they need. We continue to work closely with the FCA on the delivery of the Financial Inclusion Strategy which is intended to do just that.
Verdict: AMBER (55/100)
The reply gives a clear, specific answer to the first part of the question, explaining how the Duty helps firms identify groups with poorer outcomes and act on them, with concrete examples such as product design, fair value and understandable communications. The second part, on the Duty's impact on consumers who lack access to products, is only partly answered. The reply notes the Duty's limits but does not assess its impact on that group, and instead turns to general coordination and the Financial Inclusion Strategy without giving substance. A reader would likely need to ask again for specifics on that second point.
How we got there
| Question item | Coverage | Specificity | Rationale |
|---|---|---|---|
| What is HM Treasury's assessment or view of the potential impact of the Consumer Duty on people with access to mainstream financial products? | Addressed | Direct | Statement 3 directly describes the Duty's effect on people with access to products, saying it helps ensure firms identify groups with poorer outcomes and act on them. Statements 2 and 4 add concrete mechanisms (target-market design, fair value, understandable communications, and reduced barriers across the customer journey). |
| What is HM Treasury's assessment or view of the potential impact of the Consumer Duty on people without access to mainstream financial products? | Partially Addressed | Hedged | Statement 5 gives a relevant limit on the Duty's reach for consumers who lack access (it does not require firms to serve every consumer), but the reply never assesses what the Duty's impact on this group is. It mostly pivots to general coordination and the Financial Inclusion Strategy, which is named but not described in substance. |