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.