The Financial Conduct Authority will expect providers’ governance of product risk to be of the same standards associated with vehicle safety and over-the-counter medicine, according to the FSA.
In its Journey to the FCA document, published today, the regulator says the FCA will have a greater focus on product governance and says firms should make their own pre-approval processes more transparent to increase consumer trust.
The document says: “Provider firms will be expected to have robust procedures to assess their target market, perform adequate stress testing and manage the product risks for consumers.
“We would expect the sorts of standards that consumers associate with basic vehicle safety or over-the-counter medicines, for example, to be the norm for widely sold financial products.”
The document goes on to add the FCA will go further than the FSA in challenging providers on the value of their products.
It says: “If necessary, we will be ready to intervene directly by making intervention rules to prevent harm to consumers by restricting the use of specified product features or the promotion of particular product types to some or all consumers.”