The UK's financial watchdog has said that the upcoming Consumer Duty will require a significant “shift in culture and behaviour” across the e-money market.

In a letter to UK payments firms the Financial Conduct Authority (FCA) said that it expects significantly more from payments firms, including a more “outcomes-focused” approach to consumer protection.

“We recognise that the implementation of the Duty comes at a challenging time,” wrote Matthew Long, director, payments and digital assets supervision, FCA. “However, we believe that embedding the Duty effectively will help payments firms continue to build trust amongst consumers in using the expanding range of products and services and enable the sector to continue to grow in a way that delivers consistently good outcomes for customers.”

The regulatory recently warned that there are still some financial services firms behind on planning for the Duty.

The rule-change, which comes into force in July, is designed to set higher and clearer standards of consumer protection.

New firms as well as regulated firms will need to comply with the overarching principle of the Duty, which stipulates that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and get the customer support they need, when they need it.

The regulator has reviewed a sample of implementation plans, finding that while many firms have shown they understand the shift by establishing extensive programmes of work to comply with it properly, others risk struggling to apply the Duty as they have not yet put in place sufficient planning.

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