TCF could help businesses prosper, finds Ellen Bennett

Sarah Wilson, the FSA’s director of Treating Customers Fairly, was as clear as a regulator can be on Tuesday. “There is a real risk that many firms will miss the final deadline in December 2008 [for implementing TCF],” she told a packed hall of delegates at a conference on the initiative.

With this conference, and the publication of a progress report on the financial services industry has made on the six TCF objectives, the FSA has laid its cards on the table. Companies have a little over a year to get up to scratch or face a tougher regulatory regime.

Wilson stated that, if the deadline were missed, it would be a “huge missed opportunity for the industry”, with “significant regulatory consequences”.

These would include: “Increasingly requiring the use of skilled persons; imposing demanding risk mitigation plans with challenging deadlines and remediation work”.

This is the stick the FSA is using to drive the industry, but there is a carrot too, as other speakers at the FSA-organised conference were keen to point out. Treating customers fairly means keeping customers, and selling more products to them, which in turn means higher profits. This reward is all-too-often ignored, both in the FSA’s statements and the industry’s internal discussions about TCF. But if those businesses that implement the changes by the deadline are rewarded with lighter touch regulation as well as happier customers, then in the long term at least, everyone wins.