It’s now been two years since the Financial Conduct Authority (FCA) published its final rules and guidance around Consumer Duty.
This has resulted in significant levels of transformative action being taken across financial services as firms have been tasked with re-evaluating their customer interactions to ensure they comply with the new standards.
Simply put, the successful implementation of Consumer Duty necessitates a seamless engagement and reporting process within consumer-facing businesses, which has generated new processes and procedures for intermediaries and lenders alike.
This involves following the right customer journeys, capturing and storing data accurately, and interpreting it effectively.
A subtle difference
At the heart of this transformation is technology, and this continues to play a critical role in helping firms adapt to the new regulatory landscape.
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However, despite ongoing efforts, research from Moneyhub indicates that 41% of customers have not noticed any changes in their treatment.
The Moneyhub research, which surveyed over 2,000 UK consumers, found that only 22% of respondents noticed improvements in how they are treated since the Consumer Duty regulations came into effect.
Additionally, 13% of respondents felt that firms have failed to provide good-quality support and after-sales care, 12% indicated a lack of effective communication aiding financial decisions, and 10% reported that firms did not offer suitable products and services that meet their needs.
Technology-driven change
As more consumers shift toward digital financial transactions, firms must adapt to these changing preferences while ensuring compliance with regulatory frameworks like Consumer Duty.
With the rise of digital interactions, customers now expect seamless, intuitive experiences on online platforms. Technology plays a key role in meeting these expectations by offering services such as automated processes, real-time data access, and personalised customer journeys.
This digital transformation not only enhances service efficiency but also allows firms to engage customers in the ways they prefer to transact. By leveraging advanced tools, companies can improve transparency, communication, and alignment of financial products with customer needs.
Simultaneously, technology helps firms meet regulatory requirements by automating compliance processes, securely managing customer data, and monitoring interactions in accordance with FCA guidelines.
The FCA has consistently emphasised the importance of data in responding to Consumer Duty. Its recent multi-firm review into insurance outcomes highlighted the need for firms to use new data sources to design comprehensive measures that evaluate both consumer and process outcomes.
This approach helps to ensure that vulnerable customers receive the same quality of outcomes as non-vulnerable customers and that ongoing monitoring leads to proactive improvements.
This means that technology partners must carefully develop comprehensive programmes that not only address compliance requirements but also enable firms to use the gathered information to improve service standards and foster stronger, long-term client relationships.
Continuous improvement and collaboration with tech partners who offer additional support is essential in meeting Consumer Duty demands and ultimately providing the right solutions for clients at every stage of the advice and borrowing process.
As the regulatory landscape evolves and the shift toward digital transactions accelerates, the role of technology in providing both efficient and compliant services will become even more important.
