Treating Customers Fairly (TCF) is significant and its impacts will be felt for some time to come. Why has it been introduced and how might financial services players best respond do it?

First, TCF is at the heart of the Financial Services Board (FSB) mandate to protect customers. If all providers were treating customers fairly in every interaction with them, the FSB would have done its job. Second, TCF enhances the powers of the FSB to respond on behalf of customers. Historically it has concerned itself mainly with the financial health of providers and it needs these powers to bat more effectively for the customer. Third, TCF is a critical part of the move to Twin Peaks. Under this model regulation will be split between prudential concerns, falling under the reserve bank, and market conduct issues, under the FSB. Finally, the philosophy of TCF provides an effective and flexible way to manage market conduct supervision.

It is this last point that should light the proverbial fire under every provider’s behind. TCF is managed around a number of outcomes, not a set of rules. If you don’t meet those outcomes – and it’s up to you to show how – not only will you find yourself in trouble now, but your competitors will mark the way forward and you may battle to keep up.

Providers, don’t be complacent. Lead from the front but effect the change of culture throughout your organisation. Set the benchmark for treating your customers fairly or others will and you will find yourself working hard to follow.