Are you prepared for the 2023 Consumer Duty Regulation?
The Financial Conduct Authority (FCA) is ramping up consumer protection, and this time, they’re setting out rules to improve how companies serve their customers. They’ve secured plans to introduce the Consumer Duty Regulation in 2023 and the overarching goal of this regulation is to make sure that all customer journeys are fair and equitable. The duty will promote high standards in customer service and will require all firms to:
Stop rip-off charges and fees.
Make it simple and easy for customers to switch or cancel products.
Provide quick answers to customer queries.
Provide clear information about products and services.
Give customers products and services which are a good fit for them.
Focus on the individual needs of each customer that comes to them. For example, if they are vulnerable.
As we mentioned earlier, this regulation will come into effect in 2023. But you will have 12 months to implement your rules for all new and existing products and services. So what does this mean for you?
How can you prove that you are complying with the 2023 Consumer Duty Regulation?
You must be able to prove that you are doing everything you can to develop your people. This means showing assessors that you have the training and practices in place to serve your customers in the best way possible.
How can you develop your people to comply with the Consumer Duty Regulation?
The first step is to provide effective training that your employees will do daily. When a new regulation comes in, it can be hard to find the time for training in such a short period of time. The best way to fit training in is to offer it in a microlearning format. These 3-5 minute quizzes are the most effective way to drive daily learning habits which successfully embed consumer duty knowledge in the mind of your employees.
What's even better is that employees can jump in and out of their training when they have time. If they want to top up their knowledge during a quiet period at work, they can. They can hop out of the training when they’re busy and jump right back in when they’re ready to learn again.
Full access to reporting and analytics means that you’ve got solid evidence of how you’re developing your people to comply with the 2023 regulation. You can see who’s taken up the training along with their progress so you’ll have full control of employee participation. This is crucial to prove your efforts for compliance.
What should you include in your microlearning courses?
The consumer duty regulation requires four specific outcomes for customers. These are:
They receive clear communications.
Your products and services meet their needs.
You are offering fair value.
They get customer support whenever they need it.
With this in mind, let’s define what your training should include to meet those outcomes.
1. They receive clear communication
Module 1: Communication skill training - How to effectively communicate with customers to ensure you understand their problems fully. What you need to do to provide the best possible guidance and advice.
Module 2: Document training - What information do customers need to receive when they purchase different products?
Module 3: Problem handling - How to know that your customer has received all the information they need to make an informed decision.
Module 4: How to tailor communications - How to take a customer’s characteristics into account when delivering communications.
2. Your products and services meet their needs
Module 1: Identifying the right people - How to find the appropriate target market for our products or services.
Module 2: Meeting customer needs - How to ensure that the product or service continues to meet the needs, characteristics and objectives of the target market.
3. You are offering fair value
Module 1: Communicating price - How to communicate the exact prices of our products and services, everything you need to state.
Module 2: Communicating value - How to effectively communicate the value of our products and services for the price that will be paid.
Module 3: Outlining changes - Clearly stating how any changes to products, services or offers will affect the consumer and what actions they can take to minimise risk.
4. They get customer support whenever they need it
Module 1: Meeting customers' needs - How to assess the needs of individual customers and provide the right support for them.
Module 2: Improvement for success - How to spot areas of improvement so we can provide seamless customer support.
Module 3: Delivering exceptional support - How to deliver flawless customer support, so our customers feel looked after at every stage of their buying journey.
Observe employees to reinforce behaviours
The 2023 consumer duty regulation sets a standard of care that should be provided to customers. Developing consumer duty training and then forgetting about it isn’t going to achieve the desired results and you could end up with a penalty fine.
In order to fully comply, you need to have processes in place to ensure your employees are meeting standards. The best way to do this is through employee observations.
Use a digital observation app such as Review, and observe your employees on a weekly or monthly basis. The app allows you to perform fast, in-the-moment observations on any mobile device so keeping track of performance becomes effortless.
How does it work?
Set your questions - Create questions to assess whether your employees are putting their training into action. For example, “is the employee taking the customer's individual characteristics into account when offering a solution?”
Your manager can then answer the questions. They’ll have the option to select ‘Yes/No’, use a sliding vibe scale or write a descriptive answer. During their report, they can add photos or set training tasks for employees. Every answer builds up a scored audit report. This makes it easy to see areas of strength and weakness.
Assess results - Use the app to easily see areas where your employees are struggling to implement their Consumer Duty training. You can see at a company-wide level or drill down to individual performance. For example, you may notice that employees are struggling to assess customer vulnerability. This means you can create relevant training to improve their performance in this area.
Repeat to measure improvement - Because these forms are so quick and easy to fill out, it means your managers can complete them in a matter of minutes and the more data you collect, the more insights you’ll discover. Whenever you introduce additional training, you can analyse the results to see if it’s improving compliance.
We have the solutions you need to comply in the simplest and easiest way possible
Complying with the Consumer Duty regulation is incredibly hard and without the right tools, you could be putting your firm at risk. We’ve got the training tools you need to comply fully and our technology is designed to give you complete peace of mind.
Get in touch to find out how we can help your business today.
