Organisations are currently grappling with the FCA’s Consumer Duty regulation – a catalyst for firms to protect, empower, and act in good faith with their customers. 

We caught up with our client success team – Mo Hassan and Hamish Cliff, as well as our Head of Solutions & Architecture – Neil Draycott, to gather their expert insights on how organisations should be shaping these requirements into actionable growth. 

Consumer Duty Act – What do organisations need to know?

The FCA has shaped 4 key outcomes which are instrumental in helping drive good results for customers.

• Products and Services Advice and products sold must be suitable for the customers they’re being sold to. This should consider customer vulnerabilities or attributes
• Price and Value This should always represent fair value for customers
• Consumer Understanding Customer communications should be helping consumers make effective, timely and informed decisions about financial products or services
• Consumer Support Customer service should always meet the needs of consumers

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1. Products & Services – good practice firms can follow

The FCA suggest:

• Organisations should carry out an exercise to review the products and services with greatest risk of causing consumer harm
• Organisations should build on existing product governance and assessment frameworks to meet the Duty

“Consider capturing insights from consumer demographics. This can be captured through ‘moments of truth’ such as consumer/employee interactions or consumer feedback. Once you’ve gathered the data, carry out a detailed analysis into the products and services consumers are accessing. This analysis should include the risks and benefits posed to customers when accessing your products and services.”

In addition, organisations should consider the use of analytics to help identify the products and services with greatest risk of causing consumer harm. Analytics can spot predefined keywords that might indicate problem areas such as mentions of ‘debt’. Placing greater emphasis on Quality Assurance Teams to carry this out is critical. Analytics and automation will help organisations move away from random sampling of calls/interactions towards a more targeted sampling, designed to identify products and services at greatest risk of causing consumer harm.

2. Price & Value – good practice firms can follow

The FCA propose:

• Carrying out a full value chain analysis
• Identifying whether there are hidden or unexpected costs for customers
• Identifying whether products and services offer fair value to different groups of customers

To tackle this, organisations should consider ways in which they can capture the right data sets to track and identify customer concerns and complaints around price and value. Analysing customer feedback and intent are just some of the ways this can be done.

3. Consumer Understanding – good practice firms can follow

• Developing new communication standards
• Ensuring each communication channel is effective
• Being aware of metrics available to measure consumer understanding

“Making improvements to call centre scripts to better support customers with the information and ensuring products terms and conditions are explained in a simple language are just some of the ways organisations can help meet this outcome. Offering consumers self-serve options, so they can access the information they need through a channel that works for them is another way. Lastly, consider automating communication channels such as Interactive Voice Response systems (IVR’s), to help communicate a clearer, transparent customer messaging is another good idea.”

4. Consumer Support – good practice firms can follow

• Agreeing on plans which set out the customer outcomes organisations want their support processes to deliver
• Identifying improvements in specific customer journeys to better support customers in vulnerable circumstances
• Reviewing customer support channel approach. E.g providing information to customers via their channel of choice and in ways which support good decision-making
• Reviewing support processes and whether these help or hinder good customer outcomes. E.g reviewing customer journeys and identifying any barriers to good customer outcomes
• Reviewing and monitoring metrics which help determine the support customers need including call waiting times, resolution times, first contact resolution rates, call transfer accuracy and quality/complaints themes

Data Strategies – what to consider

Having a valid data strategy is another aspect organisations need to consider when adhering to the regulations. 

According to the FCA, best practice firms should follow include: 

• Considering the data needed to measure and monitor the delivery of consumer outcomes
• Identifying the data and metrics currently available across the business and brining this together
• Considering longer-term strategic aims to improve on the functionality of systems and data collection. Also considering shorter-term solutions to evidence and monitor that Duty requirements are being met

“Managing multiple data sources can be detrimental to many organisations. With too much information, and not enough strategic alignment, data can get lost. For customer intent and the delivery of consumer outcomes to be extracted from data, consider appointing the right role within the organisation to provide the mandate and accountability for using this data. This might mean seeking external help, such as consultancy providers who can help educate on existing data systems and processes and how to improve them.”

Need advice about complying with the new regulations?

The Consumer Duty regulation was launched on the 31st July 2023, but it’s not too late to get compliant.

Get in touch with our team for best practice advice: 

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