Effective competition is essential for consumers, market participants and the industry as a whole. It also forms a key part of the FCA’s work towards achieving all three of its statutory objectives; protecting consumers, ensuring market integrity and promoting effective competition, so it is important that firms take heed of the FCA’s work to promote more effective competition and not see it as another regulatory hurdle. TCC’s Phil Deek’s outlines key ways in which your business can embrace the FCA’s focus on competition.
Competition benefits all
When competition is performing effectively it benefits both customers and the market. It can increase in the quality of services, lower prices and encourage firms to innovate their products and services for the benefit of consumers.
Improving competition within the market can encourage customers to shop around and get the best value for money. When poor competition is present in the market, customers are not inclined to shop around, it is likely that they will not gain value for money and firms may be impacted by competition forces such as market concentration and dominance.
Competition encourages firms to provide the best products and services for consumers, which naturally enhances the customer-centric culture where customers feel they are getting value for money.
Value for money
A common belief is that financial advice doesn’t represent good value for money. To change these perceptions, firms must communicate effectively with their customers and educate the wider market on the value of advice, as well as promoting its own cultural values through its products and services.
The perception of value for money is highly linked to a customer’s understanding of a firm’s culture and how the firm goes about promoting it. Ensuring the right culture is more than just complying with rules, it’s doing the right thing for your customers and seeking positive outcomes for them.
Every interaction between the FCA and a firm enables them to build up a perception of the firm’s culture. Firms should have an in-depth understanding of their own culture and take steps to measure and evidence it, which includes considering the treatment of its staff, how its culture is reflected through its products and services and how it communicates to its clients.
Firms that enhance the FCA’s competition agenda will have access to more opportunities, clients will have more choice across the market and the FCA will be well on its way with its objective of making the market work well for consumers.
To find out how TCC can help you identify and assess your culture, take a look at our Cultural Assessment Framework .