The Financial Conduct Authority (FCA) will introduce a new regulatory framework called the Consumer Duty in July 2023. This regulatory framework aims to prioritize the interests of customers in financial services organisations' operations. The Consumer Duty covers all aspects of consumer relations, and firms that fail to comply could face regulatory action, fines, and reputational damage.
To prepare for the Consumer Duty, financial services firms can leverage customer experience (CX) technology to comply with the regulation and provide a better service for their customers. Here are some ways CX technology can help
Personalisation
CX technology can help financial services firms personalise their offerings to meet the unique needs and preferences of their customers. In a recent study, 59% of consumers said that they believe businesses should use the data they collect about them to personalise their experiences. By leveraging customer data and analytics, firms can create tailored products and services that align with the interests of their customers. For example, a bank could use customer data to offer personalised investment advice.
This can help businesses meet the element of the Consumer Duty which requires firms to act in the best interests of their customers. And by offering personalised product and service recommendations that are aligned with customers' needs, organisations can improve customer satisfaction and loyalty.
Seamless customer journey
With an omnichannel contact centre solution, financial services will be able to provide a seamless and consistent customer service experience across all communication channels, including social media, email, phone, and chat. For example, a customer could start a conversation with a chatbot on the firm's website and then switch to a phone call with a customer service representative without having to repeat their issue.
By removing friction from the customer journey, firms can improve customer satisfaction and retention. This technology could help a mortgage lender to simplify the application process and provide real-time updates on the status of the application. Simple steps such as these would help demonstrate to the FCA that an organisation is acting with due care, skill, and diligence, which is another element of the Consumer Duty.
Predictive analytics
Financial services organisations can use predictive analytics to highlight areas where they may not meet consumer expectations, and use this data to improve products and services before an issue arises. This will help them fulfil the requirement of the Consumer Duty element that requires firms to act to prevent foreseeable harm to customers.
By analysing customer data, organisations will be able to identify areas of the business that do not meet customer expectations and develop targeted strategies to address them. Taking a proactive approach like this will not only help businesses reduce the risk to consumers but will also help them improve customer retention, which is crucial for sustained success in the financial services industry.
Voice of the customer (VOC)
CX technology can help financial services firms capture and analyse customer feedback to identify areas for improvement and measure customer satisfaction. By analysing this feedback, organisations can gain a deep understanding of their customers’ needs and expectations, and make informed decisions about product development, marketing campaigns, and customer service. Insurance companies for example could use CX technology to analyse customer feedback and identify trends to improve claims processing.
Organisations could also use VOC tools to prioritise improvements based on customer feedback. By understanding the most pressing issues faced by their customers, organisations can focus their efforts on the areas that will have the biggest impact on the customer experience. This feedback could also be used to identify areas where they may be falling short of regulatory requirements and take corrective action to ensure they meet their obligations.
In leveraging CX technology, firms can not only meet the requirements of the Consumer Duty but also build long-term relationships with their customers based on trust and transparency. As the regulatory landscape continues to evolve, firms that invest in CX technology are likely to stay ahead of the curve to meet the needs and expectations of their customers.
If you would like to know more about how CX technology can help your organisation meet the FCA Consumer Duty regulations, then use the links below to get in touch.