Regulation is having the opposite impact from that which the FSA hoped, says report
Fifty eight per cent of providers believe that the continuous changing of regulation is lowering consumer confidence according to research conducted by Focus Solutions.
Of these providers, 57% stated that this is due to the amount of documentation and information consumers are given within a sale and 43% because changing regulation is not understood by consumers.
Regulations of course have been brought in to standardise products and improve the service providers offer. But they believe this is lowering consumer confidence - the opposite reaction that the FSA is working towards.
A key challenge facing providers due to changing legislation is maintaining a cost effective business model with the added cost of supporting the legislation.
Many organisations have had to increase their IT budgets or delay impending IT projects to ensure that they are compliant and future proof. Reviewing and understanding the impact of legislation on the organisation was the next key obstacle for insurers, as this also impacts time and resource.
Richard Stevenson, chief executive officer at Focus Solutions, said: “Regulation is a constant in the financial services industry and as we have heard from providers unsurprisingly it is having an impact on working practices, affecting consumer’s confidence in the marketplace. The FSA publishes up to ten consultation pieces a year and to keep up with demand, insurers require smarter technological solutions that enable them to future proof their sales systems against changes in legislation."