Shantel
Key Takeaways
- The Financial Conduct Authority (FCA) introduced the New Consumer Duty regulation on July 31, 2023, and Auriemma UK Industry Roundtable members are collaboratively addressing the impact of this regulation on various operational areas.
- Different departments, such as Collections and Recoveries, Customer Service, Complaints and Disputes, and Fraud Control, are implementing strategies to align with the Consumer Duty and enhance customer experiences.
- Auriemma has launched a Regulatory Compliance Roundtable to facilitate industry collaboration and share insights on the successful implementation of the Consumer Duty regulation.
Navigating the New Consumer Duty Regulation
The Financial Conduct Authority’s (FCA) New Consumer Duty regulation, which came into full effect on July 31, 2023, has triggered a wave of collaboration and transformation across the financial industry. Auriemma UK Industry Roundtable members have been actively engaged in discussing how the regulation will impact various operational areas within their organizations. The industry’s response reflects a commitment to both compliance and a cultural shift that puts consumers at the forefront.
Collections and Recoveries: Prioritizing Forbearance and Supplier Oversight
Collections and Recoveries departments are focused on ensuring that their forbearance toolkits align with the regulation’s requirements. Notably, 23% of members have introduced new forbearance options to support customers facing financial difficulties. Furthermore, 54% of members are keen on refining their supplier-oversight strategies, a key aspect of the Consumer Duty.
Customer Service: Enhancing Communication and Readability
The Customer Service departments are placing great emphasis on improving communication structures and readability. Louis Stevens, Auriemma Industry Roundtables Director, highlights their approach: “They are reviewing their entire communications catalogue and leveraging external partners to ensure verbiage meets the average UK reading and numerology levels.” This approach ensures that customers can understand and engage with the information provided.
Complaints and Disputes: Improving Customer Experience
Departments dealing with complaints and disputes are working to enhance the customer experience when submitting complaints or claims. They are increasing the number of touchpoints to keep customers informed about the progress of their claims. Additionally, 15% of roundtable members plan to introduce text message updates as part of their communication strategy. These efforts aim to streamline the resolution process and ensure customer satisfaction.
Fraud Control: Shifting Focus on Vulnerable Customers
Fraud Control departments are adapting to track outcomes-based metrics and building reporting structures to support them. Recognizing that vulnerable customers are often targeted by fraud, these departments are enhancing their involvement in the vulnerable customer journey. This strategic shift aligns with the Consumer Duty’s emphasis on safeguarding consumer interests.
Holistic Approach: Collaborative Efforts Across Operations
When considering operations as a whole, roundtable members share common themes in their strategies. Notably, 92% of members expressed their intention to implement new training plans under the Consumer Duty. These plans aim to raise awareness within departments and provide targeted training on how the regulation affects individual roles. Outcome testing is another priority, with 70% of firms already having outcome testing frameworks in place, and the remaining 30% planning to implement them.
Beyond Compliance: Cultivating Cultural Change
While compliance with the New Consumer Duty is essential, the industry recognizes that the regulation’s true value lies in driving a cultural change. Louis Stevens emphasizes this perspective: “This is not just a cultural change at the company level either, but rather across the industry as a whole.” The collaboration among firms is crucial to ensuring the best possible outcomes for consumers.
Auriemma’s Collaborative Solution: Regulatory Compliance Roundtable
In response to the dynamic changes brought about by the Consumer Duty, Auriemma has introduced the Regulatory Compliance Roundtable, with the inaugural meeting focused on the Consumer Duty itself. This platform enables industry players to share early learnings, discuss planned changes, explore governance structures, and delve into topics such as reporting usage and third-party oversight models.
Shaping the Future Together
The future of the financial industry under the Consumer Duty regulation is one of collaboration and innovation. Auriemma’s Regulatory Compliance Roundtable aims to be a driving force behind the successful implementation of the regulation while fostering a culture of consumer-centricity. As industry players gather at the St. Pancras Renaissance Hotel in London for the first meeting on October 18, there is anticipation and enthusiasm for shaping a future that prioritizes consumer welfare and operational excellence.
About Auriemma Group
For over three decades, Auriemma has been empowering clients with data-driven insights and actionable strategies. The company’s expertise spans operational effectiveness, consumer research, co-brand partnerships, and corporate finance. By offering business intelligence and advisory services, Auriemma equips clients with the tools they need to navigate a complex landscape and optimize their performance. With offices in London and New York City, Auriemma serves the consumer financial services ecosystem. Visit www.auriemma.group for more information.
