Being FCA compliant is important for any business operating within a financial market. By being FCA compliant and following their principles, not only will you be treating customers fairly, but you will also find customers are more willing to use you when they require your financial services. More importantly, by not being FCA compliant you could be breaking the law and be subject to a large fine should you be investigated.
Below is a guide on how to ensure FCA compliance when determining staff Key Performance Indicators (KPIs) and how our FCA compliance software can impact this.
What Is The FCA?
FCA is short for the Financial Conduct Authority. The FCA (previously Financial Services Authority (FSA) – operating from 2001 to 2013) has been operating since 2013 and is there to make sure all financial dealings are done fairly, following the correct laws. No matter what sort of business you are, the FCA are there for three things, to protect consumers, protect financial markets and promote competition but in a fair way.
The FCA is an independently funded public body and are there to make sure everyone is treated fairly and consistently. Having regulated over 60,000 businesses, it is important to make sure you are FCA compliant, otherwise you could be subject to a fine or penalty, even imprisonment.
KPI Alignment With FCA Consumer Duty Outcomes
Products and Services
KPIs should support the delivery of products and services that are appropriate for the customer’s needs and circumstances. This may include measures that track the quality of fact finds, the accuracy of product recommendations, and adherence to approved sales processes. These indicators help demonstrate that sales executives are not incentivised to recommend unsuitable finance or add-on products.
Price and Value
Staff KPIs should avoid encouraging the sale of higher-cost products where they do not represent fair value for the customer. Instead, performance measures can be linked to evidence that customers have been presented with suitable options, understand the costs involved, and are offered products that align with their needs and affordability. This helps demonstrate that value is being considered alongside commercial objectives.
Within the TCF software, sales executives are guided through a structured demands and needs process, requiring them to establish customer eligibility and clearly identify whether any add-on insurance or maintenance products are appropriate, while also ensuring the correct type of finance is offered based on the customer’s needs and circumstances.
This information supports informed decision-making and helps ensure that the finance agreement selected is best suited to the customer’s individual circumstances, demonstrating that value is being considered alongside commercial objectives.
Consumer Understanding
The FCA expects firms to ensure customers are able to make informed decisions. KPIs can support this by measuring behaviours that promote clear explanations, accurate disclosures, and confirmation of customer understanding. Examples include monitoring documentation quality, recorded explanations, or post-sale validation checks that show customers understood the agreement they entered into.
In the TCF software, sales executives can upload supporting documents as evidence of these interactions. Monthly audits can then highlight where required documentation has not been uploaded or where discrepancies are identified, helping dealer groups monitor compliance and address issues promptly.
Consumer Support
KPIs should also reflect how well customers are supported before, during, and after the sale. This includes measures linked to complaint handling, cancellation rates, post-sale queries, and how promptly issues are resolved. These indicators provide insight into whether customers receive appropriate ongoing support, rather than being measured purely on sales completion.
Demonstrating Good Outcomes
By aligning KPIs to these Consumer Duty outcomes, firms are better positioned to evidence that staff incentives promote fair treatment, appropriate advice, and sustainable customer relationships. This also supports effective monitoring and governance, enabling senior management to identify potential risks and take corrective action where necessary.
How Automotive Systems Provide FCA Compliance Support Tailored to Your Business
At Automotive Systems we can support you and your business to be FCA compliant. No matter the size of your business, or the scope of your work, our FCA compliance software is tailored to support your dealership's compliance.
Areas in which we can support you are training and learning management, supply you with FCA compliance software, join us and become an Appointed Representative or help with comprehensive reporting. We have been operating since 2007 and have partnered with many of the leading Dealer Networks in the UK. With over 15 years of experience, we are able to support you.
Feel free to give a member of our experienced team a call should you have any questions about how we can support your business. Alternatively, feel free to fill in our contact form to get in touch.
Enquire now and see how we can help determine staff KPI's.
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