Gaining confidence over your automated redress calculation process

What are the key components of successful design and implementation for an automated solution?

Firms are taking different approaches to automating the delivery of the scheme. Some are using internal resources to build the capability, while others are engaging external providers and/or third-party solutions. In either case, firms should be able to evidence the governance, processes and controls in place to ensure the tool operates in line with the regulatory requirements and delivers complete, accurate and consistent outcomes at pace. Where third parties are involved, this should include appropriate due diligence, clear accountability and effective ongoing oversight of the outsourced activity.

What should firms be doing?

Firms need to move at pace to meet the FCA’s implementation deadlines while ensuring that any automated solution is robust, well controlled and capable of delivering fair, accurate and consistent outcomes. That pace-versus-control tension can create a risk of prioritising delivery speed over design quality resulting in tooling that is difficult to evidence, explain or defend to the regulator. The objective should be to deliver quickly and safely by building in governance, testing and auditability from the outset, rather than attempting to retrofit these controls later.

Firms should use the components above as a practical framework throughout the end-to-end lifecycle including design, build, test, deployment and run, supported by clear documentation. Importantly, these components are interdependent: completing one area does not “close it down”. Any change in data, methodology, process, operating model or third-party solution should trigger a check on the wider framework (for example, updating testing, approvals, monitoring and the audit trail) so the solution remains aligned to the FCA’s requirements.

Firms should adopt a delivery plan that balances pace with control, with clear milestones, decision points and minimum standards that protect customer outcomes and regulatory expectations. Delivery is often best approached through phased releases: prioritising the core automation needed to identify cases and calculate redress, then iterating enhancements under disciplined governance, version control and sign-off.

Alongside delivery, firms should maintain strong oversight throughout build and run, including appropriate data governance, proportionate testing and clear documentation of key decisions and assumptions. They should monitor performance and outcomes, manage change in a controlled way as requirements evolve, and apply effective oversight of any third-party providers. Above all, the approach should remain audit-ready and explainable, so the firm can evidence how the solution operates and why it delivers consistent, fair outcomes.

Key takeaways

Although there is still uncertainty about how stakeholders will respond, including whether any will pursue legal action, firms are already preparing to implement the scheme. A consistent priority is to introduce automation, so delivery is effective, efficient and consistent, while meeting the FCA’s expectations on quality and timelines. Automation can bring significant benefits, but it also introduces risks that need to be understood and controlled.