Consumer Duty service for financial services firms launches

The Check UX: Consumer Duty service, available to fintech companies and financial services, will support firms to make the customer experience compliant with Consumer Duty.

The FCA suggested that Consumer Duty will lead to a “major shift in financial services.” It is expected to set higher standards for consumer protection. Despite this, many do not feel prepared for it. For example, 55% of lenders admitted they are unprepared. This is against the backdrop of the FCA’s Executive Director of Consumers and Competition, Sheldon Mills, warning that the FCA will “act swiftly and assertively” and take “robust action” against firms who ignore the Consumer Duty.

When implementing the Duty, firms must consider customer needs, objectives, and capabilities, as well as behaviour at each stage of the user journey. Crucially, firms are expected to review services and ensure that the expected outcomes listed in the Consumer Duty are met.

Bold Insight says it has identified key areas in the customer experience that firms must consider when meeting the Consumer Duty, such as:

Considering the experience of vulnerable persons in the design of the product or services: In practical terms, this could include accommodations foar physical impairments (e.g., colour blindness), learning/cognitive deficits (e.g., dyslexia), or a lack of capability to understand information (e.g., due to poor language skills).

Reviewing the entire customer journey: For example, firms should not make it difficult to close accounts and must provide sufficient guidance for basic customer practices.

Positioning account risks and warnings as prominently as other key information: There should be intentional “friction” in the customer journey before making important financial decisions. Otherwise, customers may not be fully aware of the risks associated with some accounts.

Clearly disclosing where customers may file complaints or give feedback: many customers struggle to find how to do this. This is now no longer acceptable under the Consumer Duty rule change.

Dr Robert Schumacher, Managing Partner at Bold Insight, commented:

“With a short time left until the FCA Consumer Duty rules are enforced, firms are in overdrive to begin the process of adhering to these new requirements. Undergoing a review of your product’s user experience can help ensure you de-risk your company in light of the obligations of the Consumer Duty. Furthermore, this is an ongoing requirement – so improving before the deadline is important, but it’s only the beginning.”