Approaching monitoring to drive forward good Consumer Duty outcomes- Consumer Support

In a previous article, we explored key takeaways from the FCA’s recent report which sets out the results of the regulator’s December 2023 review of larger insurance firms’ implementation of the Consumer Duty.

This weeks’ article is the last of a series exploring how firms can approach monitoring to drive forward each of the outcomes under the Duty- and evidence this to the regulator. Having discussed Consumer Understanding last week, this week’s article will discuss how firms can approach monitoring in relation to the Consumer Support outcome.

Consumer Support

“Monitoring must enable a firm to determine whether retail customers receive the support they need.”

The FCA noted that although most firms had customer service targets or service level agreements (SLAs) in place to assist monitoring, it was unclear how some firms determined these, and, in some instances, the targets or SLA’s were unlikely to meet reasonable customer expectations for key journeys.

Noting that it “continues to see substandard service levels across insurance sectors”, the FCA called on firms to ensure customer support targets and SLAs are conducive to driving improved customer support. 

As reiterated across all outcomes within the report, the regulator emphasised that MI of a sufficient range and granularity must be utilised to effectively monitor the customer support outcome and firms should be able to evidence how actions to be taken are identified and prioritized. The report cites the following metrics as valuable for firms to assess customer support:

• performance against various SLAs
• analysis of whether SLAs meet customer requirements
• claims rates, claim acceptance/decline rates, including analysis
• other product and service usage rates and analysis, such as claims experience
• customer behavioural data, such as lapse rates and requests for assistance
• internal quality assurance findings, or other first-/second-/third-line analysis
• customer journey timeliness, including first contact resolution
• customer feedback including satisfaction survey feedback and net promoter scores
• complaints data including root cause analysis

The report outlined that good practice could include extensive mapping of all key customer journeys and monitoring various types of service data, including timeliness of each engagement and end-to-end transactions, and complementing this with data such as QA findings, customer feedback and complaints, to identify points where services could be improved or adjusted to enhance customer support.  

Assessing elements of the customer journey for different types of customers, specifically those with vulnerable characteristics, to identify specific barriers was also cited as good practice, as it allows firms to identify and act on areas which require improvements to be the customer support offered.

Given the increased regulatory focus on firm’s treatment and support of vulnerable customers recently, and that vulnerable customers are a key group to monitor in relation to the customer support outcome, firms would benefit from referring to the FCA’s Guidance on the treatment of Vulnerable customers when considering their approach to monitoring.

Much of the guidance on achieving good outcomes for vulnerable customers is transferrable and relevant to ensuring good customer support outcomes are achieved across all groups. For instance, as emphasised in the FCA’s report, Chapter 5 of the guidance states that firms should ensure they “collect MI at different points in the customer journey, including key points of interaction with consumers” and that any MI collected is “allow[s] [firms] to understand both the experience and outcomes of vulnerable consumers.”

The guidance stresses that “firms should not monitor MI as a one-off exercise” as “consumer needs and circumstances can change”, along with “the ways different consumers prefer to interact with firms”, and a lack of regular and effective monitoring could prevent firms ensuring they deliver the right outcomes for vulnerable customers- points echoed throughout the FCA’s report regarding monitoring.

Both the FCA’s report and guidance for the treatment of vulnerable customers emphasise that firms’ approach to monitoring should enable meaningful insights to be derived which can be converted into actions which improve customer outcomes- and that this should be evidenced to the regulator. Also highlighted is the importance of firms recognising that actively implementing Duty outcomes is not a ‘once and done’ exercise; firms must use monitoring to continuously assess whether good outcomes are being achieved in practice and determine where changes or adjustments could be made to drive good outcomes.

Additional Support 

UKGI can assist firms with measuring, monitoring and evidencing customer outcomes under Consumer Duty; if you have any questions, or need any support, contact UKGI Compliance at helpline@ukgigroup.com or on 01925 767888.

Given the continued focus on firms’ implementation of, and compliance with, the Consumer Duty, why not learn more as part of annual CPD requirements? The Development Zone has a range of relevant courses suitable for all roles and levels, including: 

• ‘Consumer Duty: The Four Outcomes’ (Multi-module course)
• ‘Consumer Harm: Identification, Prevention, and the Consumer Duty’ (Multi-module course)
• ‘Vulnerability: Identifying, Understanding and Supporting Vulnerable Customers in Financial Services’(Multi-module course)
• ‘Consumer Barriers within the Financial Services’

New to the Development Zone? Discover all of the system features, with no commitment, by signing up to a FREE 14-week trial: Free Trial | The Aviva Development Zone (mydevelopment.zone). Or, get in touch with the team at devzone@ukgigroup.com.