The digital revolution in meeting consumer duty standards
Post-deadline, the financial industry is grappling with the new standards set by the UK’s latest regulatory mandate. The objective of this update is to bring more transparency and accountability to wealth management and insurance enterprises, fostering a more profound commitment to the consumer.
Through its introduction, the regulators are pushing for a change in how financial products and services are evaluated, priced, articulated, and backed, ultimately transforming how wealth managers value their services.
Fredrik Davéus, CEO of Kidbrooke, recently explained how the integration of onboarding tools is helping to ensure that Consumer Duty becomes a more seamless practice for businesses.
As the deadline drew nearer, a varying degree of readiness was observed within the sector. For numerous establishments, a fresh strategy was necessary, particularly given the emphasis on data-driven decision-making highlighted by a KPMG article in a recent PIMFA whitepaper. The era of Consumer Duty underscores the importance of data management, processing, and analysis. This could range from adopting financial simulation tools that enhance the consumer’s grasp of financial commodities to addressing long-standing issues, like offering top-tier services to ‘orphan clients’.
In today’s digital age, businesses are almost unimaginable without an online facade. As evidenced by a Swedish insurer’s findings, digital onboarding plays a pivotal role in shaping expectations and fortifying client relationships. A dynamic onboarding process, enriched by financial analytics tools, can significantly aid firms in aligning with Consumer Duty demands, ensuring that investors have a clear insight into risk and fostering longevity in client relationships.
The value of consistency in customer experiences, especially in the onboarding phase, cannot be stressed enough. Simulation technologies can play a vital role in ensuring uniformity across customer journeys, allowing businesses to provide a consistent multi-channel experience. From a Consumer Duty standpoint, the integration of such technologies can vastly improve client outcomes by elucidating the concepts of price, value, product, services, and support.
Consumer Duty also shines a light on ‘orphan clients’ – customers of insurers who have lost touch with their advisors. Addressing their needs doesn’t necessarily mean offering financial advice. Instead, financial institutions can rely on advanced analytics tools to provide tailored solutions, edify clients about financial risks, and present self-service forecasting and scenario analysis.
In conclusion, the convergence of Consumer Duty, addressing the needs of orphan clients, and leveraging technology paints the future of wealth management and insurance. By judiciously analysing the regulatory framework and adopting tech-driven solutions, companies can ensure they provide unparalleled service while adhering to regulatory demands.
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