Consumer Duty is an opportunity for both improved customer outcomes and a deeper understanding
By Steve Brockway Maru/Matchbox | December 2022
Consumer Duty raises the bar of regulatory consumer protection in the financial services sector by shifting the regulation paradigm from a process-driven approach to one based on customer outcomes.
To achieve this, firms need improved customer insight to engage teams and consistently provide products, services, and communication to deliver good outcomes.
Financial services companies that embrace this opportunity for improved customer understanding will drive higher standards and loyalty as trust in the sector improves - which is essential when many households struggle financially during the cost-of-living crises.
What are the Consumer Duty outcomes?
Consumer understanding outcome: Communications must equip customers to make effective, timely, and adequately informed decisions about products and services throughout the journey.
Products and services outcome: Products and services are specifically designed to meet the needs of consumers and sold to those whose needs they meet.
Price and value outcome: The price of products and services represents fair value for consumers.
Consumer support outcome: Customer service meets customers' needs, enabling them to realize the benefits of products and services and act in their interests without undue hindrance.
Consumer understanding outcomes
This is a key area as it covers customer communications across the product's lifecycle. The challenge for firms when testing communications is that no one wants to admit to not understanding something. Therefore, research that relies on stated attitudes (what people say they think) will not reveal your communication's full picture or true perceived outcome.
By using a range of our platform capabilities, including smart System 1 apps, we can unlock both the rational, obvious response and what your communication is really saying to customers – what they cannot or will not tell us.
IRT (Implicit Response Time): We passively capture response time to questions, opening up an extra layer of customer insight. Response time is an established method in psychology used to unlock our true ‘Implicit’ or System 1 response – how we really feel, not just what people think we want to hear. Capturing response time enables us to isolate fast, intuitive ‘implicit’ responses from slow, rational ‘Explicit’ responses.
The key point is that we preserve traditional data at a total level, so you don’t lose anything – simply gaining two extra data points to strengthen your insight and the true outcomes of your communication.
Emotional Signature: We use a gamified survey technique with images where participants simply swipe and select images that best represent their perception of the communication. This frees customers from trying to guess the rational answer, revealing what your communication is really saying to people. Results paint a rich picture of the emotional outcomes and reactions, not just rational, process-led benefits. This engages marketing and development teams as they focus on emotional outcomes rather than only scores.
Product, Service, and Support outcomes
We have a deep heritage in CX feedback with over 20 years of experience implementing and evolving CX programs. Below we have outlined examples of how we can advise your CX program to evolve to meet the needs of Consumer Duty (for full details, download the paper)
Prioritize action: Use smart, choice-based techniques and analysis that reflect how we make decisions to understand the most important aspects to customers and then overlay this with perceived performance to prioritize action.
Use your KPI metric wisely: Don’t be obsessed with metrics such as the Net Promoter Score, which we have proved are less effective at measuring specific interactions. Instead, we can advise on when to consider other metrics, such as Customer Effort or Customer Satisfaction on the day.
Think both relationship and touchpoint: Most CX only focuses on post-interaction/touchpoint, but you should also take an overall relationship-based approach where you ensure both 'moment of truth' stages of the CX are captured, and you sample customers who have not interacted with you. By combining insight from both key touchpoints, along with a cross-section from all customers, you ensure a more representative view of customer outcomes across your product lifecycle.
Only Maru can provide CX expertise and insight through a lens of rational stated attitudes and our deeper emotional response – to reveal the full picture of consumer understanding. Our System 1 capabilities, combined with a wide choice of traditional techniques such as highlighter tools, text analytics, and in-depth online communities, provide a holistic view of how people feel, behave, and think, leading to improved understanding and a better understanding of customer outcomes.
Learn how our unique platform capabilities and deep customer research expertise can help you turn Consumer Duty into an opportunity for growth.