{"id":10106,"date":"2022-12-07T12:53:38","date_gmt":"2022-12-07T12:53:38","guid":{"rendered":"https:\/\/fintech.global\/regtech100\/?p=10106"},"modified":"2023-01-04T14:18:37","modified_gmt":"2023-01-04T14:18:37","slug":"how-can-companies-become-more-compliant-with-consumer-duty","status":"publish","type":"post","link":"https:\/\/fintech.global\/regtech100\/how-can-companies-become-more-compliant-with-consumer-duty\/","title":{"rendered":"How can companies become more compliant with Consumer Duty?"},"content":{"rendered":"

The FCA recently introduced Consumer Duty regulation, which aims to ensure customers receive communications from financial services firms that they understand. How can firms become more compliant with it?<\/strong><\/p>\n

A company with a key interest in Consumer Duty is RegTech firm\u00a0Aveni<\/a>, who recently promised to help financial services firms meet the regulation with the development of its Aveni Detect product.<\/p>\n

The Aveni Detect platform \u2013 developed as a \u2018machine line of defence \u2018 \u2013 analyses all customer interactions and mitigates against a range of risks from conduct and complaints to customer vulnerability.<\/p>\n

Joseph Twigg \u2013 CEO at Aveni \u2013 said, \u201cPositive customer outcomes are at the heart of the FCA\u2019s Consumer Duty regulation and this presents a huge test to companies who position themselves as\u00a0customer-first<\/a>: now they really need to prove it.<\/p>\n

\u201cThis level of measurement beyond purely operating profits, growth and margins will put some businesses outside of their comfort zone, but it must be taken really seriously. Consumer Duty is a game-changer and needs to be viewed as such. It requires investment in technology, in processes and in people.\u201d<\/p>\n

Twigg stated that in order to deliver good customer outcomes, the FCA makes it clear that demonstratable data results are the only way it will accept the proof that the levels of compliance required are being achieved.<\/p>\n

\u201cThe onus is on the financial services businesses \u2013 no matter how big or wall \u2013 to demonstrate that they are offering the optimum quality and risk assurances.<\/p>\n

\u201cTheir ability to deliver, demonstrate and prove truly positive customer outcomes is being called out and a failure to comply could have serious consequences \u2013 financially and even legally.\u201d<\/p>\n

A\u00a0recent study by Moneyhub<\/a>\u00a0found that over a third of companies have limited knowledge of the new legislation, with many turning to technology and data to solve their issues. This offers a sea of opportunities for companies who are able to provide the technology for this and those looking to help promote better practices.<\/p>\n

Twigg continued, \u201cConsumer Duty does bring the opportunity to enhance and promote good business management and ultimately deliver positive bottom-line impacts for firms.<\/p>\n

\u201cThis investment in the right type of technology and resource has to be viewed beyond a compliance cost, but it is important that the technology goes far enough and has the capabilities required to drive those bottom-line savings whilst meeting regulatory needs.\u201d<\/p>\n

The Aveni CEO explained that the importance of data analysis must be high on the technical requirement list and the advancements in AI and NLP present \u2018exciting capabilities\u2019 to monitor communications, test consumer understanding, assess for vulnerabilities and ensure the right evidence is in place for the regulator.<\/p>\n

\u201cWith the right process in place this technology is embedded to ensure that good outcomes are being delivered, time and time again, throughout the customer lifetime,\u201d Twigg mentioned.<\/p>\n

What must companies be thinking about when it comes to key areas where speech-based software can boost data collection and analysis? The first key area for Twigg is consumer understanding.<\/p>\n

\u201cThe ability to measure the efforts made by agents to aid consumer understanding of products and services e.g. coverage of key information, confirmation of understanding and the agent inviting questions from the customer. Also, the ability to test different messaging and channels to see which is the most effective in aiding customer understanding.\u201d<\/p>\n

Another area highlighted is price and value. In this sense, this would be how companies measure customer sentiment towards the price and value of a product throughout the customer lifecycle to gauge eligibility and affordability.<\/p>\n

The last two areas surround consumer support and product and service. In the first part, it is key for firms to measure accessibility, sentiment to and the quality of consumer support and to better understand causes of complaints and expressions of dissatisfaction to drive improvements in customer service, agent training and product development.<\/p>\n

For the second \u2013 in product and service \u2013 Twigg highlights the need to consider how firms can use customer feedback and sentiment to improve product and service development.<\/p>\n

Spirit of regulation<\/strong><\/p>\n

\u00a0<\/strong>In the opinion of Eugiene Casier \u2013 GRC director at Clausematch \u2013 the biggest possible win could be achieved by putting the spirit of regulation front of mind. \u201cWhen implementing the Consumer Duty is done with truly good customer outcomes at the core, it is likely to be ticking the boxes,\u201d said Casier.<\/p>\n

\u201cWhat is new with the Consumer Duty, is that firms will now need to ensure they understand whether those outcomes are met and evidence that much. If companies build and iterate their products with that in mind, they are likely to be customer-centric and achieve greater success, simply because they have a better product.\u201d<\/p>\n

Casier continued, \u201cAnother way of thinking about it could be, if the offering fails to bring positive outcomes for the customer in the market, it is likely to be a transactional relationship. If you can address a customer\u2019s needs correctly at just the right time, you may well be rewarded with a returning customer in a financially greater position than before and thus generating recurring revenue.\u201d<\/p>\n

Casier explained that from a marketing perspective, there is an \u2018element of efficiency in the outcomes\u2019 with the Consumer Duty regulation. \u201cIf your marketing is not misleading and targeting a suitable customer, you may impact your customer acquisition cost positively.\u201d<\/p>\n

Hugo Veazey \u2013 financial crime compliance lead at Moody\u2019s Analytics \u2013 added that there are four key areas that organisations need to familarise themselves with to ensure compliance with the regulation.<\/p>\n

These were the areas of consumer understanding, products and services, consumer support and price and value.<\/p>\n","protected":false},"excerpt":{"rendered":"

The FCA recently introduced Consumer Duty regulation, which aims to ensure customers receive communications from financial services firms that they understand. How can firms become more compliant with it? A company with a key interest in Consumer Duty is RegTech firm\u00a0Aveni, who recently promised to help financial services firms meet the regulation with the development […]<\/p>\n","protected":false},"author":4,"featured_media":10108,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[53,54,55],"yoast_head":"\nHow can companies become more compliant with Consumer Duty? - RegTech100<\/title>\n<meta name=\"description\" content=\"The FCA recently introduced Consumer Duty, which aims to ensure customers receive communications from FI firms that they understand.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fintech.global\/regtech100\/how-can-companies-become-more-compliant-with-consumer-duty\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How can companies become more compliant with Consumer Duty? 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