The FCA also revealed in its business plan that it's facing a £30m Brexit bill this year
The City regulator says the treatment of existing customers by financial firms remains a top priority over the next year, with a focus on insurance prices and competition in the current account and cash savings market.
The Financial Conduct Authority (FCA) has been conducting an investigation into how companies treat their loyal customers as opposed to the treatment prospective new clients receive.
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FCA needs £30m extra for Brexit but the real cost will be higher still
The watchdog said in its business plan for 2018/19, published on Monday, that while many firms “have made progress in putting customers more firmly at the centre of their business models, they need to further improve both competition and their standards of treatment for existing customers”.
The particular areas the FCA is looking into include understanding firms’ pricing practices in retail general insurance; assessing claims inflation in general insurance
“Our aim is to ensure that existing customers enjoy the benefits of increased competition and innovation. Firms should not give longstanding customers less attention than new customers or treat them in a way which results in poorer outcomes,” the FCA said.
“All customers should be well informed about the financial products they buy or are invested in, including performance and charges. If competition is working well in a market, it should not overly disadvantage existing customers over new customers.”
The FCA said Brexit will cost it £30m this year, which it will fund partly through an extra levy on regulated businesses, as well as by cutting back on non-core activities.
Andrew Bailey, FCA chief executive, said: “We recognise that this year we need to dedicate a significant amount of resource to withdrawal from the EU.
“As a result, setting our priorities this year has involved a particularly rigorous level of scrutiny and challenge to focus on areas where we see the greatest potential for harm.”
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