FCA sets out good practice for the consumer support outcome

The FCA has published findings from its review of firms’ approaches to the consumer support outcome of the Consumer Duty.

In May 2024, the FCA conducted a qualitative survey of 407 firms across the retail financial services sector, which was followed by an information gathering exercise covering a sample of 40 firms in September 2024.

Key features of good customer support frameworks were:

• Setting clear objectives
  • Identifying who the product is designed for and understanding their needs, including any characteristics of vulnerability.
  • Defining what good outcomes look like for customers, taking into account their needs and objectives.
• Defined actions
  • Demonstrating how support channels are designed to meet customers’ needs and help them pursue their objectives.
  • Embedding a culture focused on good outcomes, including providing staff with appropriate training and support.
  •  Some firms undertook customer journey mapping to identify and address possible ‘sludge’ practices.
• Outcomes monitoring
  • Monitoring and regularly reviewing the outcomes customers are experiencing, with appropriate metrics.
  • Some firms used proactive tools (such as speech analytics technology in call centres) to assess the quality of support they provide and identify potential risks of poor outcomes.
• Reflection and reform
  • Spotting risks of poor outcomes and understanding the root cause, with processes in place for continuous improvement.

The FCA also identified the following areas for improvement:

• Suitable support processes
  • Some firms had not aligned their support processes around their customers’ needs, while others lacked a clear understanding of their target market.
• Post-sale support
  • Some firms had poor outcomes for customers trying to access support, such as long wait times and inaccessible information.
  • The FCA urges firms not to disproportionately focus on pre-sale support to the detriment of post-sale support, including where services are provided on a firm’s behalf by a third party.
• Embedding culture
  • Some firms could not demonstrate substantive steps taken to drive cultural change under the Consumer Duty, with some lacking appropriate training and other measures in place for staff.
• Monitoring a broader range of outcomes
  • Some firms relied on transactional metrics, such as contact rates and wait times, or took a solely reactive approach in their monitoring, relying on customer feedback or complaints.
  • Where customer support functions were outsourced to a third-party provider, the FCA observed mixed progress of firms implementing effective MI oversight or information flow with the third-party.