How to Adapt Customer Communications to Align with the UK’s New Consumer Duty Standard

The UK’s Financial Conduct Authority (FCA) has raised the standards for consumer protection in financial services with its new Consumer Duty guidelines, which puts the onus on financial institutions to deliver specific customer outcomes. This will have considerable impacts on financial institutions as all aspects of the customer relationship are now subject to higher consumer protection standards:

 “We want firms’ communications to support and enable consumers to make informed decisions about financial products and services. We want consumers to be given the information they need, at the right time, and presented in a way they can understand.”

-PS22/9: A New Consumer Duty. 

With Consumer Duty coming into effect in April of some financial institutions may find themselves struggling to deliver the expected outcomes. Many of the outdated customer communication systems and processes in place today were built to simply get communications out the door and not with the customer experience in mind. Here is a closer look at some of the customer communications standards outlined in Consumer Duty, why some financial institutions might have trouble meeting them, and how modern solutions can help:

Creating clear and understandable content

“Use plain and intelligible language and, where use of jargon or technical terms is unavoidable, explain the meaning of any jargon or technical terms as simply as possible”

-PS22/9: A New Consumer Duty.

Customer communications are typically written by subject matter experts and legal teams for whom industry terminology is second nature. It can be difficult for these industry insiders to set aside their expertise and adopt the perspective of the average consumer. Considering the average reading level in the UK is that of a nine-year-old, it cannot be overstated how important clear and simple communications are.

Cutting-edge customer communications systems offer additional support in the form of AI-based tools that guide content authors in improving the quality and clarity of their content. These “assisted authoring” capabilities can identify the reading comprehension level of any message so that authors know when their content might need to be rewritten in plain language. They can also help ensure customers are always given the most up-to-date information by flagging restricted terms like outdated brands, company phone numbers or addresses. Companies looking to implement these tools will need to perform a wholesale cleanup of their existing content library. Fortunately, some solutions combine the process of migrating to modern CCM tools with the process of content optimisation so that the business can start fresh with a clean set of communications.

Driving relevancy and personalisation

“In supporting the understanding of retail customers, the firm must Tailor their customer communications to the customer’s characteristics and the nature of the product or service.”

-PS22/9: A New Consumer Duty.

For many organisations, personalisation of customer communications starts and ends with “Dear Jane,”. Instead of addressing a customer’s specific situation, the communication outlines several reasons why they may be receiving the communication or why their application was rejected, etc.  This forces the consumer to work to understand a communication’s relevancy, which can lead to misunderstanding and confusion. The FCA has clearly stated that this level of personalisation is no longer acceptable.

At a minimum, a customer should be told exactly why they are receiving a communication, which product or service it applies to, and what actions they need to take in response. This means leveraging customer datapoints like product mix, financial history, location, and age to appropriately deliver the right content. While most customer communications solutions claim to support this, implementing it typically requires exponentially more work for the business. Every layer of personalisation requires an additional set of templates to be built, which is not only a lot of up-front work, but also requires continuous effort to maintain.

Institutions should look for solutions which enable communications to be dynamically assembled using relevant, curated content components. These components could be graphics, content fragments which are small bits of text like the phone number for a customer’s branch, or larger blocks of text like a regional regulatory disclosure, or a reason for a declination. These components can be shared across communications and channels, while being centrally created, edited, and controlled from a single point of change. This approach is not only far more efficient, but it also results in customers only getting information which directly pertains to the products they own and their unique financial situation.

Offering channel flexibility

“We do not prescribe which channels firms must offer, but firms must ensure the channels of support they do offer meet the needs of their customers, including customers dealing with non‑standard issues, and customers with characteristics of vulnerability.”

-PS22/9: A New Consumer Duty.

The FCA expects financial institutions to be flexible when a customer’s situation “makes certain channels of support unsuitable.” The illustrative example they use is that of a customer who was unable to read large print or braille asking their bank to send communications by email so they could use a tool which turns emails into speech. As it stands right now, many financial institutions would find it difficult to accommodate such a request with the current technology and approach they have in place.

Most organisations manage their customer communications content for each channel separately. Each channel has a purpose-built technology stack with its own library of templates. This approach makes it very time consuming and costly to create a set of communications across multiple channels. The same content is redundantly authored and managed in multiple, disparate systems. Organisations need to explore solutions that enable them to manage the content in one spot, sharing the right renditions to each of their communication channels. Within a “content hub,” content is managed separately from any specific channel or system where it might be displayed. Content can then be leveraged for any touchpoint in any channel, whether it be a printed letter or communication that is dynamically generated via an API call to support a mobile application. This gives organisations the ability to meet customer requirements and preferences. Should the FCA decide to mandate supporting customers’ digital preferences, something which they did consider when drafting this iteration of Consumer Duty standards, new channels can be added with ease. A centralised content hub also helps drive consistency across the customer experience. Consumer Duty standards apply to the entire customer journey, so having a unified solution for all customer communications ensures that compliance and brand standards are always adhered to.

Financial institutions do not have much time left before Consumer Duty comes into effect. Those who stick with out-of-date customer communications systems will find it challenging to meet and maintain these higher standards. Those that opt for modern customer communications can not only improve the clarity and personalisation of their content, but they will also have the flexibility and agility to react to future regulatory shifts and to move into an increasingly digital future.