Time to consider a Sludge Audit?

The term “sludge audit” may not be part of the regulatory lexicon, but the idea that a business should walk in its customer’s shoes to understand the customer experience and potential drivers of poor outcomes is an activity that closely aligns to the FCA’s regulatory priorities.

The following Thomson Reuters article quotes Natwest’s Head of Behavioural Risk, Alexandra Chesterfield, who explains why they have commissioned this piece of work and why behavioural science might help identify circumstances which obstruct customers from achieving their goals. At a time when the FCA’s focus on TCF and vulnerability is as high as ever and Boards are frequently asked to satisfy themselves that they have effective strategies, governance, control and oversight arrangements in place to assess and evidence the fair treatment of customers, is this something that more firms should be pursuing? Within our Risk Advisory practice we advise on important questions such as:

  1. How to best design an enterprise wide approach to TCF which embeds those principles within your governance, systems and controls, customer journey and organisational culture and leadership approach?
  2. How can Boards gain assurance on whether a firm is treating its customers fairly and how should they respond to requests for assurance when challenged by the regulators?
  3. How should Senior Managers responsible for the delivery of fair outcomes within their business units set themselves up to discharge their reasonable steps?
  4. How can you ensure that your approach to vulnerable customers is consistent with regulatory expectations and the FCA’s most recent guidance?

We draw on our extensive advisory and contentious regulatory experience in this area to provide practical guidance and advice. Do get in touch if you’d be interested in discussing this topic further.