Supporting vulnerable customers: under the consumer duty, companies are expected to assist and support customers’ understanding of products and services. Customer needs in this respect will, however, often vary, and vulnerable customers will typically require additional support and assistance to understand a product. Companies should ensure that they have suitable plans in place that mean they can provide a “level playing field” to all customers, and that they are not taking a blanket approach to all customers. This may include having a variation of an internal policy, or potentially even having a supplemental implementation plan that is specifically drafted with vulnerable customers in mind. Staff training on how to deal with vulnerable customers should also be documented and recorded. By taking this kind of approach, businesses will be able to further show that they have sought to address the feedback published by the FCA following its multi-firm review; that is, that they have sought to embed within their business all the substantive requirements of the duty.
Customer data: the overriding goal of the consumer duty is to ensure companies are delivering good outcomes for retail customers. So, any data that links directly to the customer experience will be particularly useful for businesses in demonstrating to the FCA how the duty is working.
The type of data that all companies may wish to provide includes:
- evidence of compliance with any key performance indicators;
- copies of annual complaint data, grouped by product type;
- general customer satisfaction scores;
- copies of any substantive written feedback received from customers.
Companies may also want to provide data that is specific to their particular product or industry. In an insurance setting, this may include the average number of claim acceptances received from insurers — a regular increase may show the FCA that the insurance products being sold by insurers and brokers are providing good outcomes to policyholders, since more claims are being accepted.
In the case of mortgage brokers, this may include providing data about the average number of mortgage products being made available to customers and on what average terms, and whether there has been a notable change to this following the introduction of the duty.
Conclusion
In conclusion, the consumer duty is a landmark moment for both the FCA and the companies it regulates, as well as for consumers themselves. Businesses should be mindful of the potential pitfalls of non-compliance and make sure that they do not take their “foot off the gas” now that the duty has been formally implemented.
