The Retail Conduct Risk Outlook (RCRO) was published today by the Financial Services Authority (FSA). The publication, which is FSA’s first, deals on how the present, future, and probable risks in retail could make an impact on customers.
The RCRO is actually the FSA’s main strategy to protect the customers by doing the following: (1) determining beforehand the risks involved, (2) actively pre-intervening in product chain, and (3) taking the clients out of harm’s way. The publication includes an analysis of the risks that are both present and forthcoming and is reflective of how the FSA will handle its resources for its priority projects. All these will be included in the FSA Business Plan in April.
The RCRO also includes an analysis of the setting where the FSA, the authorized firms, and the consumers operate. It makes an assessment of the major macroeconomic trends, the temporal states of the regulatory field, the recent progress in companies and markets, and the main concerns of clients, plus the risks that threaten all these.
FSA chairman Adair Turner, in his prelude to the RCRO said, ““The Retail Conduct Risk Outlook is a timely reminder of the consumer protection challenges facing the FSA, its successor bodies and financial firms over the coming years. It analyses how environmental trends may influence how firms treat their customers, and assesses the resulting potential for poor customer outcomes. The RCRO informs our dialogue with firms and consumer representatives on conduct risk and will play an essential part in our work to mitigate the potential risks to customers in the future.”