• Doing business with the FSA
  • Being regulated
    • Treating customers fairly
      • TCF culture

It is only through establishing the right culture that senior management can convert their good intentions into actual fair outcomes for consumers and ensure that delivery of these outcomes is sustainable.

Expectations of firms

We expect firms to be able to demonstrate that senior management have instilled a culture within the firm whereby they:

• understand what the fair treatment of customers means;
• expect their staff to achieve this at all times; and
• firms promptly identify (a relatively small number of) errors, put them right and learn from them.

TCF culture framework

In our July 2007 paper Treating customers fairly - culture [PDF] we published a culture framework, based on six 'key drivers', which we believe have a significant influence on behaviour in firms.

The paper also includes examples of good and poor practice from our visits to verify the framework and our TCF experiences. We strongly encourage firms to consider the issues we have identified in this publication and think about how to use the framework to review their culture on treating customers fairly.

Indicators	Key drivers	Contra-indicators
Fair treatment of customers is central to the behaviour and values of all managers, they communicate messages about the fair treatment of customers effectively and apply appropriate controls and monitoring to ensure that the fair treatment of customers is delivered by their staff.	Leadership	Managers (at any level) cannot explain and/or do not communicate what the fair treatment of customers means for them and their staff and cannot demonstrate that their staff understand what the fair treatment of customers means.
The firm has a clear vision which supports the fair treatment of customers. This is reflected within the formulation and implementation of strategic decisions (including change management programmes and outsource arrangements). The firm’s risk appetite reflects customer considerations.	Strategy	The firm’s vision is unclear/blurred or contradicts the fair treatment of customers. It does not consider the fair treatment of customers when making key decisions about future direction.
Decision making at all levels reflects the fair treatment of customers. The firm uses staff, customer and other external feedback where appropriate, with timely action. The interests of customers are properly balanced against those of shareholders (and other customer groups).	Decision making	Minimal evidence that decisions reflect any consideration of the impact on customers. The firm is slow or unwilling to react to customer/staff feedback. Conflicts between the interests of shareholders and customers are consistently and inappropriately resolved in favour of shareholders.
The firm has controls, including management information, that aim to ensure and demonstrate the fair treatment of customers. These controls are integral to the firm’s risk framework.	Controls	The firm cannot evidence customer protection through its controls, has minimal management information and does not use this information to improve its treatment of customers.
Management make positive behaviours and attitudes to the fair treatment of customers a key criterion in the selection of staff. They also make effective training and the maintenance of staff knowledge, behaviours and values core to the business. Managers use performance management to develop their staff in the fair treatment of customers, identifying and acting on poor performance and rewarding good performance.	Recruitment, training and competence	The firm has inadequate arrangements to recruit, train and assess the competence of staff whose actions affect customers. It has little focus on the fair treatment of customers and has a lack of appreciation of how staff competence has an impact on customer experiences. Poor performance is tolerated.
The firm’s reward framework (including incentive schemes) throughout the business is transparent, recognises quality and supports the fair treatment of customers.	Reward	The firm’s reward framework concentrates on sales, volumes and profit without consideration of quality (i.e. the framework drives behaviours which may result in customers being treated unfairly) and there are no controls that mitigate the risks that arise from this framework.

 

 

 

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