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Consumer Duty: Are customers at the heart of your business? It’s your duty to prove it (and fast)

Consumer Duty: Are customers at the heart of your business? It’s your duty to prove it (and fast)

Issue 467 | 3 April 2023

Consumer Duty: Are customers at the heart of your business?  It’s your duty to prove it (and Fast)

Teresa Connors from Payment Matters shares her thoughts on Consumer Duty…

We’re at an inflexion point, as firms are becoming aware / coming out of denial / realising it’s not just a compliance thing and tackling the enormity of the task to embed and prove embedment of the FCA Consumer Duty.  

The FCA suggests that at this stage, firms should be 80% through implementation, while some firms are making tangible progress, many firms are not as advanced as they would like to be in readiness for the on sale product deadline of 31 July this year. 

Crucially, discussion and activity are turning from “why” to “how” as firms create and implement plans to prove that customers are at the heart of their business, demonstrating that they meet the Consumer Duty cross cutting principles of:

  • Acting in good faith

  • Avoiding foreseeable harm

  • Enabling and supporting retail customers to pursue their financial objectives

In addition, firms are creating and adapting systems and processes to demonstrate good customer outcomes spanning the four Consumer Duty measures:  

  • Products and services - proving that products and services are designed to meet the needs, characteristics and objectives of a specified target market

  • Price and value - demonstrating fair value which has a reasonable relationship between the price consumers pay and the benefit they receive

  • Consumer understanding - ensuring and proving that communications are easy to understand and equip consumers to make effective, timely and properly informed decisions

  • Consumer support -  evidencing that the support provided meets consumers’ needs throughout the life of the product or service

FCA feedback

A useful temperature check regarding the quality of firms Consumer Duty plans came recently from the FCA, based on a review of a cross section plans, it makes for uncomfortable reading but gives a steer on where greater focus might be needed, three headlines are:

  • Prioritising work that resolves the greatest customer harms

  • Embedding the substantive requirements.  A clear message is given about superficial consideration and / or over-confidence in the adequacy of existing policies and processes

  • Working with other firms in the distribution chain to implement the Duty on time, a reminder that value chains can contain firms that do not have direct customer access but could have a material impact on customer satisfaction

It’s important to stress that these are headlines, fuller feedback is available on the FCA website, but the overall message is clear, there’s work to be done.


The need to evidence embedment across the whole business is challenging.  Different businesses have different challenges, some challenges though are universal.  By no means exhaustive, but based on my discussions with businesses of various sizes, three of the common challenges are: looking beyond products and services, adapting channels and processes and thirdly MI. 

Turning the spotlight on these challenges together with some tactics to help prove embedment:

It’s wider than product & services

At its core, the Consumer Duty seeks to protect customers from harm in every journey made with a firm.  It’s not just product, or support journeys or complaint journeys – it’s every journey and interaction a customer has with a firm.  When designing and reviewing journeys firms should be cynical and honestly consider “What’s the worst that can happen?” this simple question could pro-actively identify possible customer harms and then solutions can be devised to mitigate them.  Often, it’s hard for firms to assess products, processes or journeys that they have developed, they are simply too close, an independent critical friend can bring sharp focus, identifying uncomfortable truths or blind spots.

In addition to mapping all customer journeys the full distribution chain should also be mapped, including parties that do not have direct customer contact. Discussion and agreement needs to centre on the materiality and liability that each party has on the end customer. Consumer Duty echoes the regulator refrain of same activity, same risk and seeks to ensure good standards and outcomes across the whole value chain.

Channels and processes

Ensuring that channels, processes and systems are demonstrably Consumer Duty compliant can take time and resource.  While newer firms typically have fewer people, arguably they are better placed to quickly create or adapt processes, customer communications and channels in comparison to larger firms where setting up or tweaking existing systems can be more challenging due to the number of internal sign offs needed and legacy systems. 

The pressure on smaller firms can be keenly felt though, as the premium is often on fleet of foot development and a fail fast culture. The fail fast culture could be equated to learning on the go, so it needs to be carefully balanced with a fully compliant Consumer Duty approach where robust pre-launch consideration and mitigation has been given to possible customer harms.

Regardless of the size of the firm, a full gap analysis needs to be undertaken and plans delivered to evidence compliance.  An area that is sometimes overlooked is comparing and contrasting the customer experience and information provided when using different channels, for example does a customer receive the same information if they use an app compared to if they call a company directly? 

Consumer Duty isn’t a one time exercise, systems, policies and processes need to be refined, monitored and measured on an ongoing basis, especially if sales are made in new markets.   


Proving good outcomes for customers relies heavily on collecting the right data and its analysis.  The starting point should be “What’s needed to evidence and prove customer centricity?” rather than “We have KYC records, customer satisfaction surveys and a complaints log, we’re good to go”.  MI should include among other attributes, customer characteristics including vulnerability and the support provided, ongoing insight to all customer journeys, product performance data and market benchmarking of propositions.  

Proving embedment across the firm is paramount;  a firm’s reputation is not enough, as reflected in FCA feedback. The requirement is for ongoing, quantifiable, data and analysis proving good customer outcomes across all journeys.  This is an area where firms can sometimes become lost in the forest that is data, an independent critical friend can bring objective clarity and help shape high quality appropriate data.

The clock is ticking…

Every firm and proposition are different so one size doesn’t fit all when it comes to proving that customers are at the heart of a business.  Many implementation plans are based on the four Consumer Duty outcomes which is a sound foundation, but care needs to be taken to avoid a siloed approach.  Regardless of approach, time is of the essence with the implementation deadline for on sale products just 4 months away. 

Many firms do not have the budget for, or necessarily need, full Consumer Duty consultation, they simply need an independent, objective critical friend to provide steer and challenge…  if you need a critical friend, please contact Teresa Connors via LinkedIn….

Teresa Connors, Managing Director of Payment Matters

Thank you to Teresa for sharing her thoughts on Consumer Duty.

Here’s a quick bio from Teresa:

I’m an NED and adviser to payment firms.  Cut me in half and you’ll see that at my core, I’m a Banker.  As a Banker, I’ve led regulated product teams & global market engagement programmes, in addition to collaborating & debating at industry forums and conferences.  Looking through a different payment lens, I’ve also worked with a global technology company, shaping propositions for Bank partners.  

The payments landscape is complex, the tension between innovation, regulation and participants creates a dynamic market.  For me, the most important market participant is the customer; as an NED and adviser, I work with firms to deliver customer centric propositions underpinned by robust corporate governance.

As Teresa says many firms do not have the budget for, or necessarily need, full Consumer Duty consultation, they simply need an independent, objective critical friend to provide steer and challenge - if you need a critical friend, please contact Teresa via LinkedIn.

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