The Consumer Duty: Balancing convenience & care in customer experience

Over the past decade, the banking and finance industry have been forefront of pioneering exceptional CX, investing heavily in digital channels to offer their customers a frictionless, personalised banking experience. Challenger banks have eliminated their physical presence altogether, whilst even the most traditional banks have recognised the need to deploy automation-led self-service.

But what is the tipping point, when self-service and automation go a step too far and start alienating customers? What duty of care do banks have to ensure enough friction is created in automated services to give customers the best outcomes?

BFSI businesses have the challenge of striking the right balance between convenience and care when designing a CX strategy, offering self-service with accessible human touchpoints when required.

While innovative technologies like artificial intelligence can play a critical role in automating processes and streamlining services, incoming communications to BFSIs are often emotive and complex and in need of careful, empathetic handling.

To respond effectively and provide the appropriate level of care and empathy, agents need to be accessible, approachable, and equipped with the tools to diffuse situations and transfer customers to the relevant sources of help as quickly as possible. This creates a sense of trust, making customers feel valued and listened to, rather than just another number in a queue.

Looking through a vulnerable customer lens

Exceptional customer experience isn’t just about convenience but also about care, especially when it comes to serving vulnerable people.

The Financial Conduct Authority (FCA)’s report from 2020 found that more than 50% of UK adults displayed at least one vulnerable characteristic based on their health, financial resilience, and/or life events that could have a detrimental impact.

To better protect vulnerable consumers, the FCA introduced its Consumer Duty, demanding organisations recognise and consider potential vulnerabilities in all consumer-related decisions to ensure that everyone receives the same level of service.

In other words, it will require UK-based BFSI businesses to put their customers’ needs first, set higher and clearer standards of consumer protection across financial services, and proactively assess and evidence how they deliver positive consumer outcomes.

The introduction of positive friction, the implementation of small obstacles during automated processes that slow users down to encourage thinking, supports better decision-making. It can enhance a user’s experience by providing them with decision points and improving their understanding so that they feel fully in control of the choices they are making.

Ensuring compliance with the Consumer Duty

While the new rules (laid out in the FCA Policy Statement) don’t come into force for new and existing products open to sale or renewal until 31st July 2023, and July 2024 for closed products or services, businesses have already witnessed the potential repercussions should they fail to comply.

News that William Hill had been fined £19.2 million for failing to protect consumers and weak anti-money laundering controls demonstrates that those who take the FCA’s words lightly will be hit with full force.

So, how exactly should organisations look to respond and reposition to ensure compliance with the Consumer Duty?

While the FCA offers clear guidelines, companies must also take internal steps to ensure that consumer-facing agents are properly supported in their roles.

An agent-first approach

Here at Cirrus, we whole heartedly believe in an agent-first culture. By properly supporting agents with a combination of tools including specialised training, feedback systems, and innovative technologies, like AI and analytics, they will be supported and better placed to provide compassionate service to customers.

 Implementing an omnichannel customer service solution will also aid BFSI contact centres. While omnichannel greatly benefits the customer, enabling them to choose the communication channel that is most convenient for them, it’s also valuable for agents who may request to operate in those areas that play to their strengths.

Further, AI can be deployed to automate processes and filter out any less urgent queries to self-service options and divert critical issues straight to an agent.

Ultimately, BFSI organisations should not view the FCA’s Consumer Duty as a burden, but an opportunity. Those who achieve compliance will unlock competitive advantages.

By providing exceptional care and support to all customers – including those who are most vulnerable – BFSI firms will be able to create a culture of empathy and understanding, driving loyalty, trust, and an improved reputation.