We know that FCA’s Consumer Duty is a marathon, not a sprint. As FCA’s Director of Cross Cutting Policy & Strategy Nisha Arora reminded us recently, “The Consumer Duty is not one and done.”
The purpose of Consumer Duty is to bring improved customer service and to ensure that consumers are receiving value for their money. This isn’t something that’s going to happen overnight, nor is it something that can be implemented on a single occasion and called a success.
Customers’ expectations of value change. Their life experiences change. We are, as humans, constantly in flux and the Consumer Duty regulation is there to support each person at every stage of their financial journey.
So, what has been achieved since the implementation of Consumer Duty, and where have firms dropped the ball?
Let’s take a look.
Letting down the consumer
The FCA completed a Financial Lives survey, which found that a significant number of consumers were reporting failings from their financial service providers. From repeated communication in a format they couldn’t understand, to being unable to reach their banks or impossibly long hold times, it was unsurprising only 41% of the population actually has faith in the financial service industry.
Lack of suitable access to services, such as digital platforms for communication, increases the gap between the consumer and their financial service provider, increasing risk and hurting relationships and trust.
In an industry with so much at stake, it’s imperative that these sentiments change.
Consumer Duty successes
It’s not all doom and gloom. Nisha Arora highlighted in her speech that there were good practices coming into play, no small thing considering the sizable shift in operational mentality and performance required.
She found that there were firms simplifying the language they used in their communications, which was coupled with more accessible formats to improve outcomes for vulnerable customers. Firms were showcasing from the get-go what their products include and exclude on their websites, giving customers a better understanding of whether or not this meets their needs. Firms are reviewing their fees, keeping fair value at the forefront.
With these steps in place and more on the horizon, a firm can continue to build itself into a place where it can successfully service each of its customers, taking due respect and care with their personal circumstances.
Continuity is key
But how do we keep the momentum?
Those championing the FCA’s Consumer Duty implementation have one thing in common: commitment to the change and continuous improvement is the only way to ensure future success.
It’s not about bringing a couple of practices into play, but about an entire disruptive shift in the way that you run your organisation. Keeping all customers, including vulnerable customers, at the heart of Financial Services means that you will strive for more impactful improvements and a success that carries your business forward.
It’s no easy task, so what do you do? Where do you begin?
We’ve said it before, but it bears repeating: the FCA are embracing new technology, and so should you. Not only does this provide them with evidence-backed, data-driven reports, it also significantly improves customer experience for vulnerable customers by bringing in a wealth of new resources.
To give that some perspective, let’s use an example. For customers who are blind or partially-sighted, a traditional paper letter won’t serve them. By using email communication, they can access software that can read letters for them and help them make appropriate responses.
Tools, such as our free Consumer Duty Board Report Template, can help you better understand where you are succeeding and where you might need to implement changes to improve your customers’ experience. Reporting to include customers’ specific vulnerability markers, their understanding of your products and communications, will help you to shape your entire operation to be accessible, forthright, and trustworthy.
There are lots of other tools for you to embrace as you continue on your Consumer Duty journey. Make sure you check out our recommendations below.
List of available resources:
Aveni’s free Consumer Duty Report Template
Google EEAT Score to check user understandability
Kore Labs product management