In July 2022, the UK’s financial services regulator, the Financial Conduct Authority (FCA), introduced the Consumer Duty – a new set of rules for better consumer protection. The Consumer Duty includes an underlying requirement that firms should be able to demonstrate clearly the actions that they have taken to comply as well as the outcomes of those actions.
This is precisely the kind of challenge that Voyc was created to help with.
What is the new Consumer Duty?
Through the Consumer Duty, the FCA wants regulated firms to give full consideration to the best interests of their customers in everything they do – operationally and strategically.
Compared with the previous regulation, the Consumer Duty focuses less on detailed rules for firms to follow and very much more on customer outcomes that firms are expected to deliver. And to demonstrate that they are delivering – whenever requested by the regulator.
The main elements of the Consumer Duty are the new Consumer Principle, the three Cross-Cutting Rules and the four Outcomes.
What are the Consumer Duty rules?
‘act to deliver good outcomes for retail customers’
It’s important to note that “good outcomes’’ here is based on the viewpoint of its own customers. Therefore, each firm must take time to consider and decide what makes a good outcome as experienced by the customers in its particular target market.
What’s more, published guidance on the Consumer Duty stresses the requirement for every firm to pay close attention to the needs and circumstances of vulnerable customers in its target market.
The three Cross-Cutting Rules define the underlying behaviours and approach that firms should adopt under the Consumer Duty. The FCA is likely to test the actions of individual firms against the standards set by these rules:
What are the four outcomes in the Consumer Duty?
What are the key deadlines for the Consumer Duty?
31st July 2023, for all existing and new products and services
31st July 2024, for products and services held in closed books
How can Voyc help?
In the Voyc Action Checklist featured below, we highlight a total of 22 different ways in which Voyc can help financial services firms meet the detailed requirements of the new Consumer Duty.
These can be summarised into four key areas:
By compliance monitoring 100% of your firm’s customer interactions and delivering instant alerts when potential issues arise, Voyc enables the business to maintain a constant focus on delivering the best outcomes for customers. This covers the four key areas of the Consumer Duty: Products and Services, Price and Value, Customer Understanding and Customer Support.
What’s more, you can tailor the comprehensive MI that Voyc delivers to the precise needs of the business at all times.
The Consumer Duty clearly states that firms are expected to validate initiatives and developments aimed at delivering good customer outcomes, by conducting reasonable tests.
Voyc can help you implement, measure and evaluate the results of those tests, in a way that fully documents and supports the resultant decision-making.
Voyc provides detailed and unambiguous insight into customer interactions – setting the scene for open and constructive communication and teamwork throughout the business’s customer-facing operations.
This helps to deliver an internal culture that is fully focused on delivering good customer outcomes – as clearly expected in the new Consumer Duty.
The FCA has made it clear that it requires firms to be able to provide clear evidence of their compliance with the Consumer Duty.
The data-based insights and reports that Voyc produces enable firms to deliver detailed feedback on the business’s customer interactions and the impact these have on all four of the Customer Outcomes underlying the Consumer Duty.