FCA review of customer support – culture, metrics and the removal of sludge

Journey mapping to identify potential ‘sludge’ and innovative uses of data analytics: just two examples of good practice in the FCA’s review of firms’ approaches to the customer support outcome under the Consumer Duty. 

This was published together with its review of its vulnerable customer guidance and examples of good and poor practice there (see this post for the details).

The FCA wants firms to deliver support that meets customers’ needs throughout their relationships with firms, supporting them in pursuing their financial objectives. 

Good customer support frameworks:

• set clear objectives;
• define actions (such as how support channels are designed to meet customers’ needs);
• monitor outcomes; and 
• ensure reflection and remediation where harm is identified.

Here are the key points from the FCA’s review.

Align your support framework with your target market

The FCA called on firms to tailor their customer support to specific customer cohorts within their target markets. This requires firms to thoroughly understand their customer base, so that they can tailor their support accordingly.

Firms are employing various methods to better identify vulnerabilities and then to offer tailored support. Examples include keyword searching web chats for relevant words, generating follow-up flags for sales operatives; using data analytics to generate a potential vulnerability ‘score’; and monitoring account activity for indicators of gambling-related harm, following up with positive friction and staff training to refer customers to organisations that support those in financial difficulty.

The human touch is increasingly important. Consider complementing a digital journey with human touchpoints whenever complex needs are identified. Smaller firms have an advantage here, with the FCA praising a wealth management firm that regularly contacts clients by phone. 

Firms demonstrating a poor knowledge of their customer base and target market – who were consequently unable to demonstrate that their support had been designed with the needs of customers in mind - were criticised, as were those who appeared to still prioritise making sales over good outcomes. 

Access all areas

Firms were praised for improving the accessibility of their communications.

Specifically on support, behavioural insights have come to the fore again (listen to our podcasts on behavioural biases, UX design and “dark patterns”). The FCA praised firms that have reviewed end-to-end customer journeys and removed unnecessary frictions – and encouraged firms to assess the impact of their support arrangements on customers’ ability to act in their interests. Some firms have work to do on making offboarding as easy as onboarding - almost one in five customers reported difficulty finding contact information for financial services providers.

Broaden your mind on metrics

Top-performing firms had broadened the range of metrics that are being monitored, to give a richer understanding of overall outcomes. Alongside information about complaints or feedback (transactional data), they also gathered qualitative information such as colleague feedback, file reviews, interviews with customers, regular senior review of call recordings, innovative tech like speech analytics, and robust quality assurance of support. The FCA expects firms to have moved beyond simply existing repackaging data and will be look for evidence that firms have sought quality assurance on the support that they offer.  

The FCA delivered its now-familiar message that MI and oversight of outsourced arrangements must be to the same standard as for intra-firm functions. It’s not enough just to measure operational efficiency.

Consider cultural drivers

The FCA praised firms that had elevated customer support within their remuneration, performance management and governance frameworks. Some now use ‘Customer Advocacy’ as a performance metric, require all staff to spend time engaging with customers, specifically recognise individuals for customer support achievements, or offer additional pastoral support to staff managing challenging customer interactions (having identified a link between employee “drain” and poor customer outcomes).

As in the FCA’s findings on Consumer Duty Board reports (read our blog post), the FCA again highlighted that firms must be able to demonstrate the steps they’ve taken to drive cultural change.

In other words: show your working. Firms need to be able to demonstrate the steps they have taken to drive cultural change in line with the Duty, rather than simply asserting that they have appropriate measures in place.