Are You Up to Speed With Consumer Duty?

Consumer Duty continues to be a major focus for UK organizations regulated by the Financial Conduct Authority (FCA), with businesses under increasing pressure to demonstrate how they are delivering fair outcomes for customers.

And whilst many have already taken positive steps to adapt their processes, policies, and training programmes, the expectations around Consumer Duty are still evolving. Therefore, customer contact leaders cannot afford to treat it as a one-off, box-ticking exercise.

That’s why we spoke to Matt Radford from Vulnerability Managers about the latest developments, to give you a closer look at what’s changed recently and how to keep up.

Organizations Are Now Expected to Proactively Demonstrate How They Are Supporting Good Customer Outcomes – Not Just Avoiding Poor Practices

Historically, the FCA’s expectations around customer fairness and protection were limited to rules and guidance around how to treat customers fairly.

The introduction of Consumer Duty has strengthened this, with higher expectations to demonstrate exactly how they treat customers fairly as part of any sale or engagement of services that they might undertake with them.

The key difference now is that organizations are expected to proactively demonstrate how they are supporting good customer outcomes – rather than simply avoiding poor practices. This represents a significant shift for many, especially those operating in heavily regulated industries, such as financial services.

Consumer Duty Impacts More Than Just Compliance Teams

And there’s a lot to take in! Particularly as one of the biggest misconceptions around Consumer Duty is that it only affects compliance departments or senior leadership teams. In reality, the requirements reach much further across the organization.

Of course, customer service teams are particularly impacted because they are typically responsible for managing ongoing customer relationships and handling customer concerns.

However, its relevance across other departments should not be overlooked – as Consumer Duty applies to anyone working under the umbrella of the FCA with regard to services that have been sold to a member of the public or are being managed as part of a contractual agreement.

This broad scope means organizations need to think carefully about how Consumer Duty is reflected throughout the entire customer journey – from sales and onboarding through to complaints handling and account management.

Standing Still Is Not an Option

It’s equally important to be aware that the FCA continues to clarify and update their guidance, meaning leaders need to make a habit of regularly reviewing the Consumer Duty framework to stay abreast of what’s changed.

(If you haven’t looked at it recently, you can find out more on the FCA website here.) The good news is that part of this evolution has been about clarity and so, where guidance was historically ambiguous in some areas, it’s now far more transparent and accessible.

Everyone Must Have a Clear Understanding of What “Fair” Looks Like

Customer contact leaders must also collaborate if they are to succeed in this space – as, quite frankly, compliance cannot and should not sit in isolation.

Instead, organizations need to put the emphasis on ongoing collaboration between compliance teams, operations leaders, training managers, quality assurance teams, and frontline advisors to ensure everyone understands what good customer outcomes actually look like in practice.

This is because one of the most challenging aspects of Consumer Duty is being able to clearly explain how customers are being treated fairly.

Yes, policies may already exist, but Consumer Duty requires organizations to go further and demonstrate how fairness is embedded into everyday decisions, communications, and processes.

“It’s extremely important for teams to be aware of exactly how customers are treated fairly, because if no one can answer that, then it’s going to be very hard to demonstrate how you’re meeting that duty under the FCA.

Whatever you’re doing, whatever you’re selling, whatever relationship you might have with a member of the public, everyone must operate with an awareness of exactly how you’re doing so in a way that’s fair and transparent.” – Matt Radford

The FCA Is Focusing Heavily on Outcomes

Another major theme running through the Consumer Duty is outcomes, as the FCA increasingly wants organizations to move beyond simply following processes and instead focus on whether customers are genuinely benefiting from the products and services they receive.

This shift towards outcomes means organizations need better visibility into the customer experience too. This includes looking at whether communications are clear, products are suitable, and whether vulnerable customers are receiving appropriate support.

Therefore, leaders should be reviewing everything from scripts and processes to training materials and customer communications, as well as considering whether their teams are empowered to identify situations where customers may need additional clarification or flexibility.

Some organizations are now even investing more heavily in quality monitoring, customer feedback analysis, complaints reviews, and vulnerability identification to ensure they can evidence positive customer outcomes.

This is all helping to ensure that Consumer Duty is embedded into the day-to-day culture of the organization – moving beyond a tick-box exercise to a living, breathing programme of regular training, effective reporting structures, and ongoing governance to ensure standards are consistently maintained.

Your Actions Need to Be Appropriate for Your Size and Structure

Amongst all this, it’s about doing what’s right for your organization and avoiding a one-size-fits-all interpretation of the guidelines. Therefore, organizations also need to take a proportionate approach based on their size, structure, and services.

Consumer Duty Is Reshaping How Organizations Think About Fairness

Consumer Duty is continuing to reshape how UK organizations think about customer fairness, transparency, and accountability.

The FCA’s expectations are undoubtedly becoming clearer, yet the challenge for many leaders is still turning those expectations into practical day-to-day behaviours across the entire business. And whilst this is UK specific, there are lessons to be learnt all round.

Ultimately, the focus now needs to move beyond awareness and towards embedding Consumer Duty into operational processes, training, governance, and culture – as a one-off, box-ticking exercise is no longer sufficient!

Thanks to: Matt Radford, Professional Conduct Committee Deputy Chair at the Chartered Institute of Fundraising and Chief Executive Officer of Vulnerability Managers

If you are looking for more information on compliance and Consumer Duty in contact centres, read these articles next:

• What Does the EU AI Act Really Mean for Contact Centres?
• 6 Steps to Navigating Consumer Duty Closed Book Implementation
• Are Call Centre Employees Equipped for Consumer Duty?

Author: Megan Jones
Reviewed by: Jo Robinson