5 ways finserv firms can prepare for Consumer Duty
Embracing Consumer Duty to Deliver Positive Outcomes for the UK Financial Services Sector
The new FCA Consumer Duty is intended to improve customer outcomes and promote better customer experiences in the financial industry in the United Kingdom (UK) by setting higher and clearer standards of consumer protection. By prioritising customer interests and designing products and services that meet their needs, firms can create more positive and beneficial experiences for customers.
What Is Consumer Duty?
Consumer Duty Principle, proposed by FCA, is a significant new legislation for the UK Financial Services sector. The legislation aims to set a consistent and increased standard of care to customers, and mandates organisations to put the needs of the customer first.
What Are the Details of the New FCA Consumer Duty?
The FCA Consumer Duty has three golden rules that every UK financial organisation will need to adhere to:
Act in Good Faith Towards Customers: Organisations are required to act in the best interests of their customers and prioritise their interests over their own. They must also ensure that their products and services meet the needs of their customers.
Allow and Support Customers to Pursue their Financial Objectives: Organisations must design their products and services to meet the needs of their customers and ensure they are fit for purpose. They must also ensure that their pricing is transparent, fair, and not misleading.
Avoid Causing Foreseeable Harm to Customers: Organisations must provide clear and accessible information to their customers about their products and services, including any risks associated with them. This includes communicating in plain language and avoiding jargon or technical terms that customers may not understand.
How Will the Act Benefit Consumers and Financial Organisations?
If you get it right, our experts at InMoment foresee the Consumer Duty Principle bringing many benefits to consumers and financial organisations alike, such as:
Customer Trust and Loyalty: Putting the customer’s interests first can lead to increased customer satisfaction, positive word-of-mouth, and repeat business.
Efficiency and Effectiveness: By designing products and services that meet the needs of your customers, you are likely to see increased efficiency and effectiveness in your business operations. This can lead to cost savings and improved profitability.
Brand Image and Reputation: By promoting responsible business practices and prioritising customer outcomes, you can enhance your company’s reputation as a socially responsible and ethical business.
Consumer Duty + Experience Improvement = Customer Centricity!
Customer experience (CX) platforms can help financial services organisations comply with the FCA Consumer Duty more effectively by helping them better understand their customers’ needs, improve their products and services, and ensure that they are acting in their customers’ best interests. With an integrated CX approach of leveraging the right data, technology, and CX expertise you can take the right action to comply with Consumer Duty in the following ways:
Data Management: Managing customer data more efficiently helps to better understand your customers’ needs and preferences, which is essential to designing products and services that meet those needs.
AI-powered Analytics: Analysing customer behaviour and preferences helps you identify areas for improvement and make adjustments to products and services in order to better serve customers.
Communication Management: Managing communications with customers more efficiently ensures that they receive clear and accessible information about your products and services and that any concerns or questions can be addressed immediately.
Compliance Management: Tracking compliance activities ensures that all customer interactions are recorded and monitored and reported correctly and efficiently.
Five Ways Financial Organisations Can Prepare for Consumer Duty
To comply with Consumer Duty, better technology, data management, and improving customer experiences will be crucial to the success of every financial organisation in the UK. At the onset and in the future, it will be necessary to make experiences, compliance, and reporting processes more efficient. Here’s a few ways InMoment ca help you to prepare and ensure your organisation is set up for success.
#1: Proactively Detect Consumer Intent to Complain
Ensure you respond to complaints. Simplify the process by applying a tool that automatically identifies and alerts you to those customers who intend to complain or even switch providers. Using InMoments AI-powered technology, those customers who intend to complain, but have not yet done so, can be flagged, with a formal case raised to resolve their issue, avoiding a formal complaint and potential fine.
#2: Comprehensive Review and Audit of Survey and Listening Posts
Start a comprehensive review and audit of all of your existing survey and listening posts, ensuring you are asking the right questions and capturing the most appropriate metrics in regards to consumer duty. We can provide actionable recommendations to ensure your listening posts are set up to deliver the right outcomes, and that your surveys are WCAG 2.0 compliant.
#3: Evaluate and Solve Compliance Issues at Scale
Delivering consistent and compliant customer communications can feel like a daunting task. We can help you evaluate all structured, semi structured, and unstructured communication to advise if each piece of communication is compliant with the consumer duty before they go live, providing recommendations for areas of improvement.
#4: Create Seamless Experiences for Your Most Vulnerable Customers
It is critical that your most vulnerable customers continue to have a seamless experience with your brand. Our technology can automatically alert you to any aspects of your customer journey that are not providing an inclusive experience. Through our unique Consumer Duty Taxonomy consisting of DEI, Compliance, and the Financial Services Industry Pack, we can identify those customers who are NOT getting the right outcomes, and provide recommendations on how to improve their experience.
#5: Combine a Compliance Focus With a Customer-Centric Culture
The most successful brands will be those that focus on enhancing their customer-centric culture, putting the customer at the heart of all decision making, rather than focusing only on a compliance- first approach. Celebrate and socialise positive customer experiences, champion positive customer outcomes across the entire organisation.
If you’d like to learn more about how InMoment can help, please reach out to [email protected] or click here to read our full consumer duty solution brief!
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