5 areas firms need to improve to be Consumer Duty compliant

The FCA recently released its final guidance on Consumer Duty proposals, which enforces controls on firms to ensure they provide good outcomes for customers. Aveni recently outlined the five crucial areas firms need to improve to be Consumer Duty compliant.

The new Consumer Duty is composed of an overarching principle and new rules firms will need to follow. It means consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.

It also aims to end rip-off charges and fees, make it easier to switch and cancel products, provide helpful and accessible customer support that doesn’t make people wait so long for an answer that they give up, provide timely and clear information to people and more.

Firms have 12 months to implement the new rules for their existing and new products.

Aveni has outlined five ways to help consumer lending firms meet compliance.  

Quality Assurance and oversight

Aveni stated that while a typical process would have seen around 1-3% of customer interactions being monitored in terms of processes and gent performance, there will now be a need to increase the coverage, with a primary focus on customer outcomes. It said, “Rather than a ‘box ticking’ exercise, this will form a huge part of prioritisation, triage and escalation procedures for customers.”

Agent conduct and coaching

Secondly, Aveni stated that while firms might already have induction and training programmes with regular agent coaching sessions performed in-house, there will be an expectation to provide live/near live assessments of agent conduct and performance. On top of this, automated assessments of mandatory statement or process adherence will also be needed.

It added that training will be linked directly to performance and customer outcomes, ensuring improvements are made and adhered to.

Executive oversight

Next, Aveni stated that there will be an expectation for executive teams to demonstrate a greater degree of involvement and understanding for customer processes, controls and escalation. It added that the board and executive committees will not only need to understand the number of complaints and what remedial action was taken and whether it was effective.

Complaints management

The report stated that there will be a greater focus on demonstrating that all complaints and expressions of dissatisfaction were appropriately captured and recorded. It added that the FCA will be looking for evidence of how complaints feature in product and service development.

“Currently, consumer lenders log official complaints made by customers but there will be a large number of customers who are unhappy with the product or service, may have articulated that to a customer service representative but didn’t lodge a formal complaint. It’s these important interactions that require a means of identification and monitoring for process, service and product improvement.”

Vulnerable customers

Finally, it stated that while vulnerable customers have been a key focus for consumer lending companies, they were mostly dealt with at the beginning of a customer’s journey, with pre-sale suitability assessments, staff training, vulnerability registration and access to support services.

Now, the FCA will want evidence of ongoing monitoring of customers, with the ability to identify, record and respond to their changing circumstances and continually review the suitability of the products and services they have access to.

A tool that can help a business meet Consumer Duty compliance is speech driven QA automation.

It said, “Speech monitoring software gives you a huge amount of control over your customer interactions, ensuring your customers receive a consistent and positive experience regardless of whether they’re speaking directly with you, or an outsourced third party (such as a call centre).”

Aveni’s platform captures every customer interaction, analysing it to provide the insight you need to reach a high level of compliance, as well as excellent customer experiences and agent performance.

Read the full report here.

Copyright © 2022 FinTech Global

Enjoying the stories?

Subscribe to our daily FinTech newsletter and get the latest industry news & research


The following investor(s) were tagged in this article.