Consumer Duty Compliance: Is Your Complaints Team Ready?

The July 31st Consumer Duty deadline is looming ever closer, meaning that the pressure is really on to ensure compliance. Focusing very much on setting higher and clearer standards of consumer protection across the financial services sector, Consumer Duty is set to have an inevitable impact on financial services businesses, but with research showing that a third of financial advisers aren’t ready for the new requirements, what more needs to be done to get Consumer Duty ready?

Who is Responsible for Consumer Duty?

Responsibility for overseeing Consumer Duty compliance might sit elsewhere in the business, but we’re seeing complaints teams ready to spring into action to make the changes needed to ensure Consumer Duty compliance. However, with robust complaint regulation already in place from the Financial Conduct Authority (FCA), some businesses have decided that there’s little to be done in preparation for Consumer Duty. Adherence to DISP, for example, already ensures good outcomes, causing some organizations to overlook the vital role that complaints must play in Consumer Duty compliance.

Where complaints have been missed in Consumer Duty plans, what can complaint teams do to highlight the vital role that the complaint function must play in Consumer Duty compliance?

How Can Your Complaints Team Get Consumer Duty Ready?

For those businesses still unsure of what else you can be doing, consider the following:

• Conduct a Gap Analysis

This is proving to be a smart way to cover Consumer Duty requirements. It highlights where you might be lacking, providing that additional level of scrutiny over what you’re doing, helping you to fully analyze your processes and procedures against the backdrop of Consumer Duty, showing the rest of the business how complaints simply must be a core component of Consumer Duty compliance.

• Reassess Your Processes and Procedures Under the Spotlight of Consumer Duty

This could take the form of mapping existing complaints processes, data and insight against the four pillars of Consumer Duty (the governance of products and services, price and value, consumer understanding and consumer support). This is a belt-and-braces approach that can help you to evidence exactly how you’re already fulfilling your Consumer Duty requirements and what more you need to do. By carrying out these tasks, you can see where you’re starting from. For example, under Consumer Duty, the onus is on firms to ensure that consumers do not face unreasonable barriers when complaining. While compliance teams might be focusing on the ease of the application process for customers, what about the complaint journey – is it as easy for customers to complain as it is to apply for a loan, for example? If a customer can get a financial decision in two minutes, can they progress a complaint at similar speed?

Additionally, firms need to ensure that they’re not exploiting any behavioral bias, such as a lack of understanding of finance. So, how does your complaint journey stack up? How are you ensuring that the current complaint journey meets the needs of your target market?

Management Information: Don’t Reinvent the Wheel

To fully assess the quality of the end-to-end customer journey, which is ultimately what the Consumer Duty is focused on, businesses need good quality data. Your complaints data is an invaluable piece of this wider data picture, with the potential to tap into the previously untapped insight needed to truly understand a key part of the customer journey. Complaints teams are often the only part of a business that can gather first-hand customer feedback, in combination with data into how and why customers complain and how satisfied they are with the outcomes of their complaints, all of which are core components in assessing how your financial services business is meeting its Consumer Duty obligations. Considering this, the robust collection of complaints data is imperative, with a good complaint management system helping to do just this. Not only that, but the FCA mandates that organizations need to keep diligent records to evidence that they’re meeting their Consumer Duty obligations, again, another core process that a good complaint management solution, like our own Aptean Respond, can help with. The management information (MI) you’re most probably already using can help to highlight to the rest of the business the key role that complaints play in Consumer Duty compliance. You will most probably already be collecting the data needed to evidence good and fair processes and outcomes, but perhaps what’s needed is a new way of analyzing this information, viewing it through the lens of Consumer Duty. In short, what does your current reporting suite look like, who does it go to and how are you using this information?

Collaborative Working is Key

Even with the right data being collected and analyzed correctly, complaints data in isolation is not enough. For Consumer Duty, which impacts so many areas of your organization, collaborative working is key. As such, to help ensure Consumer Duty compliance, your business must be encouraged to look at complaints data alongside all other MI. This might be the addition of complaints data to your organization’s data lake, helping to facilitate an integration of complaints data that wouldn’t have happened otherwise. Or it could be a case of getting the right people in the room to assess Consumer Duty compliance, including those involved at every touchpoint of the customer journey.

Complaints at the Heart of Your Business

As we all know, the implications of non-compliance, both in terms of financial penalties and reputational impact, can be far-reaching and potentially very damaging. Consumer Duty requires your business to continuously monitor and review its delivery of good customer outcomes. Your business is responsible for providing evidence (at a sufficiently granular level) that it’s meeting Consumer Duty obligations, delivering the behaviors, standards and outcomes expected.

Thankfully, many complaint teams are already doing what they should, often using complaint management systems to deliver the level of data collection, data analysis and reporting that Consumer Duty and the FCA requires. If you haven’t already, now is the time to speak up, highlighting the invaluable role that good complaint management must play in Consumer Duty compliance. When it comes to Consumer Duty, the complaint function can lead where others need to follow and should be a core component of any Consumer Duty plans. This leading role in Consumer Duty compliance can help to position complaints at the heart of your business, demonstrating the actionable insight that can be gathered from complaints to inform continuous improvements across the organization, helping to achieve good outcomes for customers at every turn. Aptean Respond, our complaint management solution, can help your organization to meet Consumer Duty requirements. With intelligent workflows to signpost complaint handlers to the best course of action for good outcomes, in-depth quality assurance functionality and advanced reporting capabilities that can be used to evidence your compliance efforts, Aptean Respond has the potential to be a key part of your firm’s Consumer Duty toolset, helping to secure those all-important good outcomes for customers. For more information on how Aptean Respond can support the vital role of complaints in Consumer Duty compliance, contact us today.