The City regulator says that the treatment of financial firms of their existing customers remains to be a top priority over the coming year, despite its plans to scale back on work that is not related to Brexit which is estimated to cost the organisation £30m.
The Financial Conduct Authority (FCA) has been administering an investigation into how the companies treat their loyal customers as opposed to the treatment that is received by prospective new clients.
In its business plan for 2018/19 that was published on Monday, the watchdog said that while most companies “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 key areas that the FCA is looking into include understanding the pricing practices of the firms with regards to general retail insurance and assessing the claims inflation in general insurance.
The FCA said: “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.
“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.”
It said that Brexit would cost it £30m in 2018, which it will partly fund via an extra levy that is imposed on regulated businesses, as well as by cutting back on some non-core activities.
The chief executive of the FCA, Andrew Bailey, stated: “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.”