The FCA's Consumer Duty Instrument 2022 was published earlier this year and there are key milestones firms need to meet.
If you are providing financial products to consumers, how can you efficiently assess whether your products – and your processes for interacting with your customers – comply with the latest legislation?
This was the question posed by our Financial Regulation team and we supplied the answer: a sophisticated legal technology product to assist financial services firms when assessing their compliance – Consumer Duty Evaluator.
Between posing the question and supplying the answer, however, is an intricate development process. Emma Pitcher is a Senior Legal Technologist at Addleshaw Goddard (AG) who specialises in developing software through which our clients can access legal advice on demand. Now that Consumer Duty Evaluator is in full flight, Emma takes us behind the scenes of the product development process at AG and explains what it takes to deliver cutting-edge technology solutions.
Pushing the boundaries of technology
By 31 July 2023, firms must have assessed all of their retail products and services on sale at that time in relation to the consumer duty regulation and have identified any gaps in compliance. After that date, firms also have an ongoing obligation to ensure that any new retail products comply and, on 31 July 2024, the consumer duty regulation comes into force for all 'closed' products and services (those that exist but are no longer open to new customers).
When we set about designing a potential technology solution, we knew it had to enable our clients to assess their existing products and services. We also knew it would not be simple: the scope and intricacy of the new legislation meant that our starting point was a spreadsheet containing around 1,200 rows of information and logic. Fortunately, we have a number of tools at our disposal so we were quickly able to establish that we had what we needed to transform the idea into a useful product for our clients.
At AG we often use 'low-code' development software which helps us develop new ideas quickly. When trying new things, however, it is inevitable that we will test the limits of those tools we use. The sheer size and complexity of this task meant that we found those limits which, on several occasions, meant comprehensively rethinking our approach. Due to the expertise of our legal technologists and the variety of tools we have at our disposal, we have integrated no less than five different pieces of software to achieve our desired product. When we reached the limit of one tool, we found a way forward by integrating another.
Collaboration within AG and beyond
We designed Consumer Duty Evaluator's client-facing interface using the 'low code' development tool, BRYTER. This is the largest project to date which we have tackled using this tool so we sought the guidance of the team at BRYTER. Sitting down with their team before starting the build, we were able to explore a variety of imaginative ideas and start to bring our proposed solution to life. Coming together with ideas and using shared experiences to decide how best to approach this mammoth task was invaluable.
Whilst it is important to plan as much of the design as possible before we start the development process, it is not always possible to prescribe every element of it.
Throughout the project – from initial scope, through design and build, and to product delivery – our Product Development specialists at AG worked closely with our specialist Financial Regulation lawyers. We consulted other specialists as required, too. Even after we had scoped the product and we had decided which tools we would use to develop it, our Research & Development team were continually on hand to find a solution to some of those unconsidered hurdles we encountered along the way. For example, the team quickly researched, procured and on-boarded software to enable us to present data visualisations externally, something we had not anticipated that we would require but is crucial to having a meaningful product for our clients.
There are around 40,000 possible paths through Consumer Duty Evaluator's diagnostic questionnaire which provides risk indications and Consumer Duty gap analysis, so we planned for rigorous testing. Our testing team comprised of Financial Regulation lawyers, compliance specialists and legal technologists, all of whom provided their expert input as required. The engagement from these teams and the combination of our expertise is the reason we have been able to deliver a meticulously thought-out product, which will be of benefit to clients beyond FCA deadlines.
We are also grateful for the time our clients were generous enough to donate to this project, particularly to test the product as we traversed various iterations of its development. We translated their valuable feedback and suggestions into substantial improvements to the initial design and it is for this reason that I never take these opportunities for granted.
I have also been fortunate to work with a group of dedicated and enthusiastic legal technologists. Due to the nature of our Innovation & Legal Technology Graduate Scheme rotations, eight Legal Technologists have participated in this project, each of whom has joined the project at different stages of the development lifecycle. Each person brought a fresh pair of eyes, a new perspective and different ideas, enabling us to build a product which delivers the maximum impact for our financial services clients. Even after each Legal Technologist moved on to their next rotation, they have all managed to stay involved in this product in some way or another – I'd like to take this as an indication of their enjoyment of working on this project and that they'd all like to see it through to completion.
Reflect on our achievements
Working on long term projects is not always easy. When project fatigue sets in and when you are starting to hit the limits of what is possible, it can sometimes feel as though it is never going to materialise. Once client conversations and demos started, I started to realised how much we have achieved from that spreadsheet and idea nine months ago. Launching Consumer Duty Evaluator and hearing from clients - how it is helping their teams and the long-term benefits they can see it bringing, has really made our product feel 'real' and I cannot resist planning for Consumer Duty Evaluator 2.0!
What is a legal technology product?
Our legal technology products are user-friendly software tools, developed for our clients to access directly, and accessible on-demand through a web-browser. Click here to see the full range of products we offer.
For more information or any questions, please feel free to reach out and email me. <firstname.lastname@example.org>
Alternatively, look at our Innovation and Legal Technology page on the website, where we have some blogs from others in the team and some case studies.