5 mistakes to avoid in Consumer Duty outcomes testing


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A lot of people have been asking for advice on how they can get better at monitoring and evidencing Consumer Duty outcomes. It’s top of priority lists as we inch closer to completing the first year of implementation. The mandate from day one has been clear. Your company should be continuously addressing issues that risk causing harm to customers. You need to evidence the interventions you make, and then evidence the outcome of those interventions. This is on an ongoing basis. For a significant number of firms though, this is proving to be the Achilles heel in their implementation.

This isn’t just hearsay. It was one of the headline findings from the FCA’s Autumn 2023 small firms survey. And if you work for a payment services firm or wealth management firm – stay extra tuned. You’re probably having the worst time of it. The FCA found that firms in these sectors – 41% for payment services and 36% for wealth management were most likely to report struggling with this. Does this resonate with your experience? Whichever sector you work in?

We don’t want to make assumptions as to why. There’s nuance in the reasons in every sector, and in every company. And there are no hard and fast rules to follow. However, what we can do is share good and bad practice – that we see in our experience in working with clients – and from what the FCA reports in its reviews and Dear CEO letters. With all of this in mind, we thought it would be helpful to share some of the most common mistakes that are being made.

1. Assuming the data from your existing CX or voice of the customer programme is sufficient

The data and metrics you use for ongoing monitoring, and in evidence packs, need to align with the four outcomes of the Duty. Simply relying on your NPS scores, for example, may not be enough on its own. B2B lives and dies on the referral sword, but the mistake here is to conflate high NPS scores with good outcomes. These are simply ‘assumed results’. “We have a high NPS therefore we must be delivering good outcomes.” Where’s the insight here on the specific outcomes customers receive? Where’s the evidence?

  • Without targeted outcome-based insights for all business lines, how does your firm know where you’re falling short, or delivering good outcomes? What should you do next? Where and how should you intervene?

  • Without evidence how can you prove to the regulator that you’re actively preventing consumer harm, and assessing the effectiveness of your actions and interventions where you have detected poor, or uneven, outcomes?

The answers lie in your customer feedback, which is a critical part of the management information that sits behind your outcomes assessments. Here are just 3 practical use cases as an example. There are many more.

  1. Test customer understanding of a policy / product documentation

  2. Root-cause analysis of complaints

  3. Identify areas for improvement. The answer from one firm has been to launch an online panel which enables customers to provide feedback. Participating customers get regular invitations to online surveys where their views shape product and service development

What data are you collecting? Is it aligned to the four outcomes? Does it help you understand customer relationships and interactions? Are you meeting customers’ needs and expectations? Which metrics are you using?

There’s a health warning from Sheldon Mills, Executive Director, Consumers and Competition at the FCA for firms relying on re-packaging data: “Firms … need to get serious about their data and not assume they can just re-package existing information.” In examples of good practice, the FCA has found that some firms were developing new data and metrics to better understand their customers.

2. Having a narrow focus

This follows on from the point above. Everybody needs to take responsibility for good customer outcomes. The responsibility is organisation-wide. It’s not something that should just keep customer facing, and risk and compliance, teams awake at night. Do you have a feedback strategy in place to filter real-time insights across the business? Do colleagues know when they need to intervene to prevent or fix a poor, or uneven, outcome? Are they able to then report on the outcomes of those interventions? Once again, an always-on customer feedback programme will help you close the gap.

3. Nothing to see here – we don’t have any vulnerable customers

Can two opposing things be right at the same time? Consider this. The results of an FCA wealth data survey released towards the end of last year showed that almost half of portfolio managers (49%) and more that two-thirds of stockbrokers had identified no vulnerable customers among their customer base. Yet the FCA Dear CEO letter in November 2023 pointed out that 50% of us will be classified as vulnerable over our lifetime. It doesn’t take much of a calculation to know that every firm will at some point deal with customers in vulnerable circumstances.

Is your firm thinking widely enough on vulnerability? Do you need to refine how you identify vulnerability and evidence the outcomes those customers receive?

The solution? Survey segmentation will help you collect feedback from distinct customers groups, especially those that are vulnerable, to understand how, why and where they receive poorer outcomes than other customers, and take action to address this.

4. Relying on written statements

Submitting a statement that you had found no harm, with no supporting evidence, will not satisfy the requirements of the Duty. There’s not much more we can say here.

5. A lack of leadership to drive cultural change – a final thought

Consumer Duty is an exercise in customer commitment, not compliance. Firms need to be proactive in delivering good customer outcomes. You need to be listening, ready to act and continuously on the front foot to drive improvements. There’s a second health warning from Sheldon Mills here: “We do not want to see firms waiting to see if we will intervene to address an issue”.

To be agile enough to do this, you’ll probably need a shift in culture and stronger leadership from the top. Once again, Sheldon Mills sums up what you need to do in a nutshell: “… we want to see the Duty embedded across every firm at every level, with leadership from boards”. You need to ensure that the focus on good customer outcomes is understood at all levels, in your strategy, leadership, and people policy.

Start where you are

Ask yourself four questions.

  • Does our culture support the fulfilment of the Duty?
  • How do we gauge whether colleague actions and behaviour promote good customer outcomes?
  • Have we introduced appropriate governance so that action is taken where problems are identified?
  • How do we evidence all of this on an ongoing basis to the FCA?

The answers will be rooted in colleague feedback. Employee surveys will help you assess how your culture and people policies work in practice and how team actions and behaviour aligns with the Duty. (Colleague feedback obviously also adds an additional layer of insight on the client perspective).

To conclude

In the white heat of implementation, working out how to monitor and evidence outcomes slipped down the to-do list. But the onus was still on every firm to do this from day one. Avoid these 5 mistakes and the solutions are probably easier than you think. The data and metrics you use for ongoing monitoring, and in evidence packs, need to align with the four outcomes of the Duty. Use the voice of your most valuable people – your customers and colleagues – to test those outcomes and drive the business changes you need to fulfil the Duty.

Republished with author’s permission from original post.

Charlie Williams
Charlie is a customer and employee experience expert and Net Promoter Certified Associate. He has been working with organisations since 2006 helping them understand their customer experience and develop programmes that create a customer centric culture, drive advocacy and employee engagement. A specialist in the Financial Services sector, he helps clients to capture evidence of Consumer Duty outcomes.


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