Introduction
The Financial Conduct Authority (FCA) has released a comprehensive review of firms’ approaches to delivering the consumer support outcome, one of the four core components of the Consumer Duty. This publication outlines examples of good practices, areas requiring improvement, and expectations for continuous enhancement of customer support processes.
The findings underscore the importance of tailoring support services to customer needs, effectively monitoring outcomes, and fostering a culture that places consumer wellbeing at its core.
Key Points
The FCA has emphasised several key takeaways:
- Firms must provide customer support that meets consumers’ needs throughout their relationship with the firm, enabling them to gain the full benefits of products and services and pursue their financial goals.
- Good practices observed in smaller firms include induction programmes, emotional resilience training, and using proactive tools like speech analytics to evaluate support quality.
- Common shortcomings include lack of demonstrable cultural change, poor monitoring metrics, and insufficient granularity in outcome data, particularly concerning vulnerable customers.
- Firms are encouraged to use a mix of qualitative and quantitative data, customer journey mapping, and internal feedback to proactively identify and mitigate risks of poor outcomes.
Applicable Firms
This review is applicable to all FCA-regulated firms offering products or services to retail customers. These include, but are not limited to:
- Banks, insurance providers, investment firms, and consumer finance organisations.
- Smaller firms that face unique operational challenges but are still expected to adopt proportionate measures such as customer feedback analysis and benchmarking.
- Firms outsourcing customer support must ensure effective oversight and maintain robust information flow to comply with Consumer Duty obligations (see FCA Handbook PRIN 2A.4).
The insights are relevant across all firm sizes and sectors and are designed to support improvements in consumer support strategies industry-wide.
Consumer Duty – FCA Next Steps
Looking ahead, the FCA has outlined several priorities for the remainder of 2024/25 to further embed the Consumer Duty. These include:
- Continuing to review how firms monitor and deliver consumer outcomes, with particular attention to consumer support and informed decision-making.
- Issuing further guidance on good and poor practices.
- Taking enforcement actions where compliance issues are identified.
- Promoting proactive use of data and feedback mechanisms to prevent consumer harm, especially for vulnerable groups.
- Assessing broader areas such as claims handling and sustainability disclosures to ensure holistic consumer protection.
Recommended Actions for Firms
Firms are recommended to take actions to align with the FCA’s expectations and improve their consumer support under the Consumer Duty. Such actions include but are not limited to:
- Staff Training: Implement training covering customer outcomes, emotional resilience, and wellbeing.
- Cultural Integration: Ensure senior leadership embeds a culture of prioritising good consumer outcomes.
- Monitoring and Metrics: Utilise diverse data sources such as customer feedback, speech analytics, and internal staff input to track performance and identify risks.
- Support for Vulnerable Customers: Establish clear processes for identifying and assisting vulnerable individuals, including escalation protocols.
- Customer Journey Mapping: Evaluate and refine the customer journey to eliminate “sludge” practices, such as unnecessary hurdles or excessive fees.
- Outsourced Support Oversight: Maintain robust governance over third-party service providers to ensure they uphold high standards of consumer support.
By acting on these steps, firms can not only comply with the Consumer Duty but also build stronger, more trusting relationships with their customers, ultimately benefiting both consumers and the financial services market as a whole.
What Complyport Can Do to Help
Complyport offers a range of tailored services to support Consumer Duty compliance:
- Independent evaluations of Consumer Duty monitoring frameworks;
- Assistance with preparing and reviewing Consumer Duty Board Reports;
- Enhancing Fair Value Assessment procedures;
- Staff training on FCA compliance and expectations.
For expert support in strengthening your Consumer Duty strategy, contact Complyport today.
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