The Financial Conduct Authority (FCA) have outlined their findings from a review of firms' approaches to consumer support under the Consumer Duty. They have highlighted both good practices and areas needing improvement, aiming to guide firms in enhancing their consumer support frameworks.
Firms that provide consumer support should take a look at their support processes in light of this guidance. Please let us know if you would like to discuss how we can assist you with this.
What is the consumer support outcome?
The consumer support outcome is one of the four key outcomes of the Duty. It should be viewed alongside the other outcomes and cross-cutting obligations of the Duty. A firm's customer service should enable consumers to realise the benefits of the products and services they buy and ensure they are supported when they want to pursue their financial objectives.
What was the review methodology?
The review used a survey of financial services firms across sectors, focussing on the overarching requirements of the Duty in relation to the support being provided to customers across 4 areas:
- Meeting customers' needs
- Access to support
- Culture, Governance and Accountability
- Outcomes monitoring
What were the overall findings around good and poor practices?
1. Meeting customers' needs:
Good practice
Firms should design support that meets the needs of all customers, including those with vulnerabilities.
Key features of good customer support frameworks include:
- Setting clear objectives
- Defined actions
- Outcomes monitoring
- Reflection and reform
Good practice example: Using the TEXAS model (Thank, Explain, eXplicit consent, Ask, Signpost) to help ensure staff record relevant information while meeting data protection requirements.
Poor practice
- Some firms lack alignment between their support processes and the needs of their target market.
Poor practice example: Prioritising the overriding aims of making sales or retaining customers over good customer outcomes.
2. Access to support:
Good practice
- Firms must ensure that support is easily accessible and that there are no unreasonable barriers.
- Good practices involve removing unnecessary barriers and ensuring post-sale support is as effective as pre-sale support.
Good practice example: Reviewing their end-to-end customer support journeys in response to the Duty and making changes, such as removing any unreasonable barriers in exiting or switching products.
Poor practice
- There is a need for better post-sale support and more comprehensive monitoring of customer outcomes.
Poor practice example: Longer wait times for existing customers looking to terminate or downgrade their product.
3. Culture, Governance, and Accountability:
Good practice
- Embedding a culture that prioritises good customer outcomes is crucial.
- Firms should align their governance and people policies with the Consumer Duty, including training and performance management.
Good practice example: Using 'Customer Advocacy' as a performance metric for employees, which consists of various customer satisfaction metrics, to replace productivity-based measures.
Poor practice
- Firms should ensure that their culture and governance structures support the delivery of good customer outcomes.
Poor practice example: Failure to evidence appropriate training and other measures that enable staff to understand their role in delivering good outcomes.
4. Outcomes monitoring:
Good practice
- Regular monitoring of customer outcomes is essential to ensure support meets customer needs.
- Firms should use a range of metrics and feedback mechanisms to assess the effectiveness of their support.
Good practice example: Regular call listening sessions where senior management reviews customer interactions to reinforce continuous improvement.
Poor practice
- Relying solely on transactional metrics or a reactive approach to monitoring e.g. contact rates, wait times, complaints.
- Poor oversight of third party providers of the consumer support function.
Poor practice example: 13% of firms surveyed do not carry out any quality assurance on the support channels they offer.
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