Consumer Duty

The FCA emphasises the importance of recording customer calls to meet Consumer Duty requirements

3 min read

In the FCA’s recent Consumer Duty Retail Lending webinar, Jonathan Phelan, Head of Department, Consumer Finance at the FCA urged firms to record customer interactions as a critical step in being able to monitor and evidence customer understanding – a key part of the Consumer Duty measures.

 

He explains, “…I’d put the next one in capitals: keep a record of what you have said to [customers]. If it’s a face-to-face relationship, don’t just walk out, it’s not the end of the relationship. If there’s a complaint, if there’s a problem later, if the customer is going to later say ‘I didn’t understand the risk of default and what would happen,’ you need to have a record of that.

 

“The other thing I would write down in absolutely bigger, bolder capital letters is monitor the outcomes. Because you might try communicating with customers in different ways over time […] test those outcomes. Work out if more customers default if communicated in one way than if they were communicated to in another.”

 

The importance of Phelan’s message comes into sharp focus in a recent article by The FT Adviser where it reports 18% of advisors’ clients have called to cancel or reduce their protection cover due to the cost of living crisis.  Advisers and advice firms have several responsibilities under Consumer Duty, they need to:

  • be confident that consumers understand the risks of reducing their cover
  • provide consumers with cover they need and can afford to keep them protected 
  • prove customers understood the terms of their cover and any penalties when they purchased it
  • make it as easy for customers to switch, cancel or complain as it as for them to purchase the cover in the first place

 

The ability to prove customer understanding can really only be achieved if advisers have a record of what was said at the time. This serves two valuable purposes: 1) firms can test different messaging and channels to see which are most effective and continually improve the way customers are communicated to, and 2) should a customer complain there’ll be evidence in place to show how the terms of the product or service was explained to them at the time (appropriately or not).

 

Recording calls has clear benefits from a consumer understanding perspective but the value doesn’t end there. By pairing up recording calls with the ability to intelligently monitor and analyse them, organisations can unlock value across multiple areas: 

 

Improved risk assurance through greater coverage. Using speech analytics platforms such as Aveni Detect, firms can monitor and analyse every customer interaction to pick up on risks such as complaints, expressions of dissatisfaction, customer vulnerability and agent conduct.

 

Manage Consumer Duty by providing the regulator with evidence through improved MI and deeper insights and analysis into both consumer and agent behaviour. Firms can use these insights to improve customer understanding, identify vulnerability and the factors that lead to better customer outcomes.   

 

Raise agent/adviser performance by offering more engaging, personalised coaching experiences. Understand the factors that constitute a skilful and successful conversation and help teams raise their level using these insights. 

 

Drive quality assurance efficiency through speech driven automation. Machine assess each call, rank them for risks and triage the highest priority calls to human assessors for review. Auto-complete quality assurance assessments straight from the voice of the customer to drive greater efficiencies. 

 

For organisations that don’t record calls currently open themselves up to much greater risk and will be unable to provide the evidence requested by the regulator to prove aspects of Consumer Duty compliance. For organisations that do record customer interactions, the next step is to use technology to harness this wealth of insights to meet not only Consumer Duty expectations but also unlock opportunity across the business, from improvements in product and service development to elevating customer service, agent performance and more.

 

Learn more about how technology can help you mitigate Consumer Duty risks.     

   

Related posts

Adviser productivity
The landscape of mergers and acquisitions (M&A) in wealth management is undergoing significant changes, driven largely by evolving regulatory scrutiny. In a recent webinar, Jana Sivananthan, CRO at 7IM along...
AI & NLP
Aveni’s fine-tuned RoBERTa language model has been knocking it out of the park when it comes to detecting vulnerabilities in call transcripts, even beating the latest GPT-4. Over the past...
Blog
Feel like the first Consumer Duty board report deadline is creeping up on you too quickly? Don’t panic. Here are some quick and easy steps financial advice firms can take...
Adviser productivity
A number of recent, high profile cases , serves as a stark reminder of the importance of meticulous record-keeping for financial advisors. The Financial Conduct Authority (FCA) is penalising advice...
Financial Services
Just four months into 2024 and the FCA has been relentless at proving that Consumer Duty is every bit the ‘TCF with teeth’ the industry expected it to be. Companies...
AI & NLP
The financial services (FS) industry is steeped in complexity and ever-evolving regulations. From process inefficiencies to outdated legacy systems that require manual data input that hasn’t been maintained to a...
AI & NLP
What is the EU AI Act: the key takeaways   The December 2023 EU AI Act is the first comprehensive legal framework for AI in the world. It aims to...
Consumer Duty
Based on current trends and strategic planning, here are the top 5 regulatory developments the Financial Conduct Authority (FCA) will prioritise in 2024 and everything you need to know about...
Customer Vulnerability
The state of the economical and political landscapes has vastly changed customer vulnerability in the UK over the last 12-18 months. Energy prices have skyrocketed, food costs continue to increase,...
Quality Assurance
Quality Assurance challenges take many different forms. When it comes to monitoring customer calls within financial services firms, or working with sensitive data, vigilance and attention to detail are essential...
AI & NLP
We know that there’s a lot to come in the next twelve months. That’s why we asked a popular chatbot what it predicts to be the top 5 generative AI...
Adviser productivity
Cavendish Online, part of Lloyds Banking Group, has partnered with Aveni.ai, the Artificial Intelligence fintech business, to become one of the first protection distributors in the market to use AI...

Aveni’s platform uses the latest in NLP to transform productivity and risk oversight.

Scale compliance at a fraction of the cost

Cut financial advice admin from hours to minutes with Aveni’s AI assisitant

Aveni Assist

Get up and running with Aveni Assist and how it can help transform productivity and compliance. 


Aveni Detect

Get up and running with Aveni Detect and how it can help transform productivity and compliance. 


Read the latest articles from Aveni

Access our latest whitepapers, webinars, brochures and more

Jargon-bust your way to a better understanding of all things AI