Consumer Duty: Outcomes, Rules and Checklist
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.
Want to find out more?
You can read more about the new rules on this page and also in our Consumer Duty update on the Voyc blog.
UK regulated firms should also refer to the FCA’s final rules and guidance for the Consumer Duty in Policy Statement and Finalised Guidance.
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.
The Voyc Action Checklist
The Voyc Action Checklist on the new Consumer Duty covers – at a glance – the key steps you need to take to comply with these important new rules.
Includes:
Recap of the Consumer Duty
Scope of the new rules
Key deadlines for financial services firms
Detailed actions required under each of the four Consumer Duty outcomes: Products and Services; Price and Value; Consumer Understanding; Consumer Support.
Plus required actions under two key control functions: Culture and Governance ; Monitoring Outcomes
What is the new Consumer Duty?
The FCA’s expectations in the new Consumer Duty are summarised in the new Consumer Principle, which requires firms to:
‘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:
Act in good faith towards retail customers
Avoid causing foreseeable harm to retail customers
Enable and support retail customers to pursue their financial objectives
What are the four outcomes in the Consumer Duty?
The four outcomes are a crucial part of the new Consumer Duty because they define the results that the FCA expects firms to deliver – and to show that they have delivered:
Outcome One: Products and Services.
Ensuring the products and services offered are properly designed to deliver good outcomes to customers in the firm’s particular target market.
Outcome Two: Price and Value.
Again, taking account of the particular needs and circumstances of the target market, ensuring that pricing is fair and reasonable, delivering good value to customers.
Outcome Three: Customer Understanding.
Designing and producing all customer communications in a way that meets the requirements of the customers for whom they are intended – including clear and adequate information of any risks involved.
Outcome Four: Customer Support.
Providing customer service that offers good and easy resolution of customer’s enquiries through channels that are clearly suitable for the firm’s target market in each case. This outcome includes customer complaints, insurance claims and the ability for customers to switch providers as readily as possible.
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.
1. Outcome-focused control
By hearing every customer interaction, Voyc closes the blind spot in the 98% usually left unreviewed and delivers instant alerts when potential risks or issues arise. This keeps the business focused on delivering the best outcomes for customers, covering 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.
2. Testing and development
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.
3. Building a supportive culture
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.
4. Robust evidence where required
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.
Download your Consumer Duty checklist here
Want to know more?
To find out more about how Voyc could help your business ensure consistency and care in every customer interaction, simply complete the form below. We’ll get back to you without delay to answer all your questions – without obligation.
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