Enabling FCA Consumer Duty compliance

• Working with a FTSE-listed financial services group to improve customer outcomes for their 650,000 retail customers.
• Assessing the needs, highlighting gaps, defining and delivering the metrics and data model needed to ensure management control.
• Outcome-led approach, using both hard and soft data collection.

The Financial Conduct Authority (FCA) introduced an updated Consumer Duty requirement for organisations that sell financial products direct to consumers – or indeed manage renewals of existing products. Expected standards are higher, and from the 31^st of July 2024, companies must be in a position to demonstrate that they have the appropriate procedures, policies and measurement in place.

We worked with a FTSE-listed financial services group that employs more than 1,200 people and has more than 650,000 customers. For various reasons, the group’s customer data is held in several different systems, and there is no single, common data model in place. This makes it tricky to meet the FCA’s reporting requirements.

Red Olive has worked successfully with this client on several other business and data projects, and has the specialist experience the group needed to deliver the data-related aspects of the wider Consumer Duty compliance programme.

The requirements of the Duty are set out in the FCA’s final rules and guidance. They include the four positive outcome areas that the FCA is seeking for consumers, sometimes referred to as the ‘Four Pillars’ of Consumer Duty. These are:

• Price and value
• Products and services
• Consumer understanding
• Consumer support

The FCA requires that regulated companies can demonstrate, in each of the areas listed, their ability to identify, monitor, evidence and stand behind the experience that they provide to their consumer customers.

Because of the high public profile and far-reaching nature of the FCA’s requirements, our client established an organisation-wide Consumer Duty programme, with multiple workstreams covering different aspects of the work.

One workstream was to provide reporting and data, and this was led by the group’s Chief Data Officer. Red Olive appointed a lead consultant working under them to establish and deliver a plan of work, which took around six months.

The scope of the work carried out was:

• Running a series of business workshops with key stakeholders to assess the company’s existing position, helping them understand what was needed under the new ‘four pillars’ regime and agreeing what would be delivered to ensure the Consumer Duty requirements were met.
• Identifying relevant gaps and translating these into more detailed requirements for data capture and reporting.
• Highlighting and implementing short-term and medium-term reporting opportunities that would benefit the business, making the most efficient use of existing resources.
• Helping users within the business to identify reporting metrics and map those to the Consumer Duty framework and pillars as set out by the FCA.
• Creating a high-level data model design to meet these requirements.

Working closely with the client team, Red Olive approached this project from the perspective of gaining good customer outcomes across the four areas above.

The internal data team identified around 20 different good outcomes and, once categorised and prioritised, set KPIs for measuring both outcomes and evidence for outcomes.

The data involved in this project was both hard data from existing systems and soft data from interactions.

Like most financial institutions, many of the group’s consumer interactions are on the phone, so speech-to-text applications that can be added to customer files, along with manual entry after conversations, were an important part of collecting the necessary data. Other soft data included feedback from consumers, employees, IFAs and other connected parties, alongside any general and serious complaints.

Red Olive created a model to meet these requirements and then ran analysis on the model’s results, to map the group’s situation in relation to the new Consumer Duty requirements as well as identifying areas for future development.

If you are looking for more clarity on how to get more value from your existing data, get in touch with us by emailing [email protected] or ring us on 0203 745 9790.