Teamspirit talks Consumer Duty
By Jo Preston on Thursday, 13 July 2023
Last week we were privileged to host a dinner with a fascinating group of people – Communications, Marketing and Risk Directors from across the financial services spectrum.
We gathered at Sky Garden to discuss the implications of consumer duty and had the chance to talk about the challenges the industry faces in an informal setting.
Ziba Goddard, Deputy CEO at our sister agency Cowry Consulting, kicked off proceedings by focusing in on the role that behavioural science can play in the Consumer Duty journey, and in empowering customers to make the right choices for them. Reflecting on the evening she commented, “Getting to the heart of Consumer Duty with the people that are thinking about it every day created such a rich conversation.
“Using behavioural science to unpick nuanced areas, such as how we 'understand understanding' was a real highlight. As behavioural scientists, we're really excited about the inclusion of behavioural principles within this regulatory framework, and it was wonderful seeing the same passion from those who are currently challenged to implement it within organisations."
The floor was opened for discussion, and it was great to hear some passionate and informed views. There was a real desire to share and learn from each other on where businesses were on their consumer journey, and an acknowledgement of the complexity that companies faced.
The focus to date has been on the customer understanding outcome which is where behavioural science has played a big role, and communication has been absolutely key. Sian Kerr from Watermelon was able to highlight, from Watermelon’s recent comprehensive research report into Consumer Duty, the gap that still exists between a consumer’s view of their understanding, and genuine knowledge(1).
84% of pension customers say that communications are clear and easy to understand, yet only 66% say they understand the fees and penalties they could incur.
However, there was a view expressed that in many ways the UK is way ahead already in its clarity of communication and product design and that it was important that businesses took things one step at a time – looking at what is done well, as well as what needs to be improved.
93% of consumers say that communications are clear and easy to understand when contacted via email.
For that reason, measuring and monitoring of customer experience was deemed vital and there was discussion about how best to manage that both qualitatively and quantitively.
Many in the room felt that the FCA would be watching and waiting – to see how the industry responds, and we then might see more best practise examples highlighted.
Commenting on the night, Teamspirit MD, Adam Smith said, “Consumer duty offers a huge opportunity for businesses in the financial services industry to go above and beyond. It was so encouraging, and frankly inspiring to discuss how FS businesses could be using the new guidance as a springboard to create even better outcomes for consumers. This is an exciting time, set to pave the way for a more creative, inclusive and compelling world of FS communications.”
The deadline might be round the corner, but it was generally acknowledged that in many ways it is just the start. Continuing the conversation and sharing fantastic examples and the challenges experienced along the way will remain vital to progress.
According to this group of industry professionals, Consumer Duty certainly isn’t just another piece of FCA regulation to carefully navigate but one of the greatest opportunities to truly go above and beyond for consumers.
if you’d like to discuss how Consumer Duty impacts your brand’s customer experience and communications, or are keen to join our next discussion, please contact us at email@example.com
(1) Watermelon’s Consumer Duty Study was conducted in February 2023 with 3500 UK consumers of financial products and services.