FCA Consumer Duty: 3 Steps to Prepare for Consumer Support Regulations

The world of Finance is changing. The Financial Conduct Authority (FCA) has issued its latest guidance for financial organizations through its new ‘Consumer Duty’ regulation. For the first time, this guidance includes specific detail on how companies must support their customers. Customer contact must be simple, quick, and reliable, otherwise major penalties could result. As the first set of deadlines approach, there is still lots to be done to ensure organizations are prepared to implement the guidance.

What does this new financial world look like? This is finance, which already purports to put the customer first. Already, organizations around the world are recognizing the importance of customer experience (CX) to the success of their business. 87% of business leaders see CX as essential to their organization1. There is a good reason for this: 96% of customers will leave an organization after even a single bad experience2. Great CX has a measurable impact on your bottom line, but now it’s more than just a smart business decision; it’s a regulatory necessity.

In this blog, Dave Clark, Financial Services Sector Lead at Content Guru, provides a high-level overview of the new Consumer Duty guidance coming in 2023. By focusing on three key takeaways for financial institutions, Dave will explore what good and bad practices look like in this new reality.

1.   Empower your consumer duty champion

July is approaching fast. If organizations don’t have Consumer Duty guidance implemented by then, they could face significant penalties. The responsibility for achieving this falls on the Consumer Duty Champion. This Champion sits on the board (or equivalent) and takes an active role in guiding the application of new Consumer support principles. The Champion should be independent, and at a level sufficient to ensure that consumer support is discussed meaningfully3.

The role of the Champion is to ask questions. The FCA’s report provides lists of possible questions the Champion might ask to ensure consumer support is being implemented properly. This includes: “Is the organization prioritizing acting to deliver good outcomes for customers?”, and “How does the organization’s culture support the delivery of good outcomes for customers?”

Ensuring that these questions are answered is not the job of the Champion alone, however. The board Chair and CEO must also take responsibility for implementing Consumer Duty guidance, though the role falls primarily on the Champion.

2.   Identify customer communications mistakes

When personal finances are on the line, great customer service is a crucial prerequisite. Even if this wasn’t an essential factor that customers consider when choosing a bank, the new Consumer Duty guidance makes it a priority. The first step to meeting this new consumer support guidance is identifying where your organization fails. What are the key points of failure that the FCA is looking to address?

Consistently poor and slow service is top of the list. If your customers are waiting on the phone in queues for hours at a time, you’re not delivering the standards of service outlined by consumer support.

Your channels of communication should be accessible to all your customers. If any channel proves inaccessible or difficult to use for vulnerable customers, this qualifies as a failure. Text that is too small to read, audio quality too poor to hear; if your most vulnerable customers can’t achieve their financial objectives because of these, your communications aren’t accessible enough. Similarly, your customer communications should receive the same level of focus as your other channels; you can’t afford to focus only on pre-sales, and disregard post-sales communications.

Even your most tech-savvy customer can become vulnerable temporarily. If someone experiences an internet outage, an internet-only communications estate will be totally inaccessible to them. At the same time, an automated telephone system that offers a limited range of options through which to progress would pose a serious impediment to customers whose problems don’t fit into a predetermined range.

Your customer communications should be flexible, broad, and accessible. The key word here is omni-channel. For example, if your telephone lines experience an unprecedented surge in demand that causes delays, a proactive warning message when your customers call up, and a post on your social media channels, will keep your customers in the loop. Whichever channel your customers prefer, you should be ready to meet them. From social media to SMS, from online chatbots to traditional telephone; your contact center solution should allow you to respond to customer inquiries across every channel from within a single interface.


3.       Measure your outcomes

Equally as critical to improving your CX, is demonstrating that improvement. Understanding the standards by which your customer contact will be measured is essential to meeting the requirements of the new Consumer Duty. The Consumer Support guidelines themselves specify numerous forms of data that could be used to illustrate your success.

Understanding the metrics of CX measurement is essential here. Statistics such as first contact resolution rates or average time to resolution are useful, but often don’t paint a full picture of your communications. Indeed, there is a broad range of metrics for measuring customer experience that can be of use.

The first of these is Net Promotor Score (NPS). This asks the customer: “How likely are you to recommend our business to others?” This question provides insight into the customer’s opinion of your business, as well as distinguishing between those who would actively advocate your business, and those who actively condemn it.

In a similar way, Customer Effort Score (CES) asks the customer to report on the effort they had to expend to reach a resolution to their problem. This metric offers feedback directly relevant to your CX, and in some cases, can help identify pain points in the customer journey.

New on the CX measurement stage is Value Enhancement score (VES). This asks the customer how successfully the customer was able to use a product or service, and how confident they are with their purchase. VES prompts the customer to think critically about a product, and even to reflect on the sales process. In asking about customer confidence, VES sparks reflection on how the customer was made to feel throughout their journey—rather than just at its end.

Contact center analytics can support proactive consumer support. For example, if an organization notices through its analytics platform that customers are terminating calls before they receive an answer, it can make proactive contact with those customers and ensure that their issues are resolved.

For a more detailed look into these metrics, see Content Guru’s recent whitepaper on CX Metrics.

Preparing for consumer duty with storm®

In 2023, preparing to meet these new Consumer Duty guidelines will be imperative for all financial organizations. With Content Guru’s cloud-based CX solution, storm®, meeting this challenge is easy. With storm CONTACT™, you can offer true omni-channel contact for your customers. All channels of communication—voice, SMS, social media, and more—can be seamlessly handled by our DTA interface and presented on a single pane of glass for easy resolution.

Through storm FLOW™, you can design automated IVRs that guide customers smoothly towards a resolution, without getting caught in loops. You can build accessible points of contact, across multiple channels, to make sure that your most vulnerable customers can always get in touch.

When it comes to reporting your progress, measuring success is achieved through storm VIEW™. Whether survey results or automatically collected data, VIEW creates flexible custom reports that cover every aspect of your CX ecosystem. In combination with storm ASK™, you can easily collect that essential data from your customers. With ASK, omni-channel surveying is easier than ever, allowing you to create easy-to-complete, accessible surveys over any channel of communication.

storm makes meeting the standards set by the new Consumer Duty guidance easy. Be prepared for what 2023 promises with Content Guru.

Discover more about storm for the financial services