TCF Monitoring and Feedback
The FSA uses formal frameworks,to enable supervisors to assess the risk a firm’s culture presents to the delivery of TCF. The approach (which varies by a firm’s size) includes looking at management behaviours and ‘cultural drivers’ that can lead to fair or unfair outcomes for consumers.
Smaller firms and TCF monitoring
In order to monitor TCF, the FSA is continuing with its three-year regional assessment programme, started in 2008. Assessments may be over the telephone or face-to-face.
Key ‘management behaviours’ looked at as part of these assessments include:
- leadership (including internal communication)
- business decisions
- controls
- internal communication
- recruitment, training and competence
- rewards
For a ‘snapshot summary’ of what these behaviours mean in practice, view the FSA tables on our page TCF indicators.
To read more about small firms’ assessments read our page Preparing for a TCF assessment.
To read about how the FSA will work collaboratively with firms see the page Ongoing TCF Support from the FSA.
The FSA will continue to communicate the findings of its work with smaller firms using web pages, the media, workshops, road shows and similar events.
Larger firms and TCF monitoring
From 2009, regular ARROW assessments of relationship-managed firms will include a TCF assessment in all cases where relevant. The assessments will involve:
- a review of TCF Outcomes with reference to a firm's own MI (if the FSA considers the MI to be robust)
- direct testing of the consumer experience (eg through call listening, mystery shopping, file reviews, and reviews of consumer communications)
- examination of any other relevant, up-to-date evidence (such as the results of recent thematic work)
The assessments will also use the TCF Culture Framework to identify where there are risks that might prevent good performance from being sustained or be causing current poor performance.
Key ‘cultural drivers’ looked at within larger organisations include:
- leadership (including internal communication)
- strategy
- decision making
- controls
- internal communication
- recruitment, training and competence
- reward
To find out more about the TCF Culture Framework, and what the above drivers mean in practice for firms, view the FSA tables on our page TCF indicators.
Rewards for successful implementation of TCF
The FSA has indicated that it will:
- make regulation more arms-length where firms are seen to be doing well in implementing TCF
- be less likely to take enforcement action if the firm can evidence that it has made a genuine attempt to implement TCF into its business
TCF failings – putting things right
Where supervision work identifies TCF failings in a firm, the FSA says that its most likely response will be to:
- agree with the firm how it intends to address the shortfalls
- where failings have resulted in a loss to customers, require the firm to offer some sort of redress
Where thematic work identifies failings this may lead to the issue of a ‘Dear CEO’ letter.
Enforcement action
The FSA has indicated that enforcement action will be taken against individuals if it is felt that business owners or senior management have failed in their responsibilities. You can see examples of enforcement action taken in our related section ‘Focus on fines’
FSA links
Read more about TCF monitoring from 2009 on the FSA website:
