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Consumer Duty compliance does not need to be complex, it is simply good business practice
· Customer Experience (CX) specialist insight6 has created a three-step plan to help firms navigate their way to Consumer Duty compliance.
The new Consumer Duty regulation is likely to be a contentious topic across all FCA-regulated businesses, but CX specialist insight6 is reassuring firms it does not have to be a business headache. Instead, it is encouraging businesses to see the added opportunity it will bring if implemented correctly.
Ian Sadler, CX Director at insight6, explains: “Putting the client’s needs first is the cornerstone of Consumer Duty – it is a good business practice that will benefit the client and enable financial firms to win and retain more business, meaning increased profits.”
The responsibility is being placed upon regulated firms to ensure they operate in their client’s best interests and treat them fairly. The regulator also requires firms to consistently review and evidence their practice across multiple Client Engagement touchpoints.
“Whilst the Duty seeks to improve the client experience, at insight6, we have concerns that some firms may see it as a tick-box exercise, adding little value to anyone. Instead, Consumer Duty is an opportunity to deliver a consistently positive client experience which will add real value to the business over the long term,” says Ian Sadler.
Firms must make their annual ‘declarations’ to include the new code of conduct rule by January 2023 but have until July 2023 to implement them. Worryingly, many firms are unclear about where to start; over 50% say they are “not ready”.
How to evidence actions and ensure good consumer outcomes
The first step to compliance should involve mapping out their current client journey and where the business currently sits within the new requirements. This can be done internally, but it is always best practice to get an independent facilitator to view your business through your client’s eyes for a true picture.
This can look at multiple touchpoints; from how your teams handle initial enquiries, responds to clients, provides information requested, or responds to messages, right through to effective complaint management and encouraging client referrals – the list of things you can review is endless.
The second step is to update or embed an effective client engagement programme – ideally based on a review or client feedback – this not only seeks to improve your overall client experience but also enables you to meet the Consumer Duty regulations.
The Duty places great emphasis on safeguarding vulnerable clients from making decisions that don’t best serve their needs. Careful consideration of the client journey and evaluation of every touchpoint with the client will enable a firm to evidence how it regularly tracks any changes to a client’s situation and detail fall back plans.
The third step involves seeking continuous feedback from your clients. It is likely the FCA will want to see client trust, confidence and fair value measured as a bare minimum, but it is an opportunity to delve much deeper into your client’s experience and achieve better results going forward.
Ian Sadler concluded: “Consumer Duty is not complicated; it is simply good business practice. Investing in a robust customer experience strategy and tailored solutions will put clients at the heart of the business to ensure good client outcomes whilst building loyalty and driving profitability.”
With bespoke feedback tools, highly trained researchers, and tailored customer experience (CX) reviews and solutions, insight6 has earned a reputation as the partner of choice for many financial services firms.
As well as working with hundreds of clients UK-wide, insight6 is the only CX specialist with a network of local experts available to support your firm on the ground.
If you need some help or advice navigating the new Consumer Duty regulation, contact Ian Sadler to arrange a coffee and a chat. Call 07891 631869, or email email@example.com