Continuing our Consumer Duty insight series, in part 3, Grath considers how technology solutions can assist firms in supporting consumer needs throughout the lifecycle of the relationship.
Part three: Consumer support
Consumer support is essential for enhancing the consumer experience by minimising obstacles and addressing what the Financial Conduct Authority (FCA) defines as “negative friction” throughout the consumer lifecycle. This involves streamlining processes to reduce unreasonable barriers, such as difficulties in making inquiries, lodging complaints, cancelling, switching or amending product terms. A well-designed consumer support system facilitates consumer actions, encourages open communication, and remains flexible at key points in the consumer lifecycle, ensuring a positive overall experience and fostering enhanced consumer satisfaction and loyalty.
The application of technology in the consumer lifecycle, specifically in instances where negative friction may be experienced will be considered here.
Within the context of vulnerable clients, the requirement on firms is clear; such consumers must be treated with the necessary support to minimise friction and “sludge practises”* so that those consumer groups are not disadvantaged. Here we see a close relationship to the consumer understanding outcome based on concise and appropriate information. Consumers are more likely to interpret and understand products and services and make the correct decisions across these as they navigate through the product lifecycle with a firm. Correspondingly, once a decision has been made, the firm should then support the consumer to act on these decisions with appropriate or positive friction and not face barriers or restrictions when doing so.
* Such practices likely take the form of commercial incentives, where firms create friction points (often called ‘sludge’) that deter clients from taking action in their best interests, such as making a complaint or switching product or provider.
This insight instalment will also consider the appropriate technology-based channels of support that are crucial to enabling consumers to reach their financial objectives, and how such support channels can be effective and accessible, thus enabling consumers to use products and services, rather than impede or restrict them.
A multitude of channels are available to firms when providing support to their clients, including telephone, email, in-person, text, written, Webchat and video calls. Channels of support must meet the needs and requirements of consumers with vulnerabilities as well as associated ‘non‑standard’ product and service issues. Where appropriate, service channels must enable efficient processes, with the consumer sighted to the status of any change, request or query and always be able to easily make sense of what the firm is providing as a product or service.
Firms should monitor the support channels they provide, using this to further develop and improve services and products, but also consider feedback that may indicate the support in itself is not fit for purpose or where lifecycles are abandoned or exited prematurely, which would be indicative of client dissatisfaction. In addition to monitoring, firms should seek to include data gathered from support channels in the form of MI and reporting to demonstrate their efforts to good consumer outcomes.
Online portal access where clients can self-serve and workflow such as inquiry types, complaint management and product amendments can be automated and in large quantities, enabling speedy and consistent treatment across all such activities. Automation lessens the administrative time burden for clients and firms alike, leading to an overall improved service to the consumer. Firms should, however, recognise that not all consumers wish to use such automation and must ensure that provisions are made for direct client interaction such as telephone and email enquiries.
Operating somewhere between full automation and human interaction, firms can also make use of chatbots to provide instant responses to common queries, guide consumers through more complex processes, and even initiate basic transactions without human intervention. The approach taken by the firm should be documented at all levels within either a spreadsheet or GRC solution, to ensure good consumer outcomes are embedded within the Risk and Compliance landscape adopted by the organisation.
With ever-increasing reliance on mobile technology, friction can be further reduced with the provision of mobile apps, clients have the flexibility to manage their accounts, raise inquiries, or make changes on the go, enhancing convenience and accessibility. Personalisation, as referenced in previous articles, allows firms to target sub-sets of consumers according to their preferred communication method and report on these to the board independently of one another.
As referenced previously in other insight articles, the continual use and development of Customer Relationship Manager (CRM) supports a comprehensive view of consumer interactions and history, allowing for a personalised and efficient resolution of issues. Customer service teams equipped with this information can provide better assistance and understanding of consumer needs.
Firms typically use multiple software applications and systems to manage various aspects of their operations. Integration of separate, yet complimentary systems allows changes, initiated by the client, to update contact information, modify a subscription, or perhaps cancel a service. These changes need to be reflected across the relevant systems to reduce impediments and delays to the client. Without integration, discrepancies may arise, leading to errors and inconsistencies in data. It’s therefore important to ensure relevant business heads are identified as leads on documenting the associated risks and attesting to the effectiveness of controls that underpin these changes and ensure the consumer is at the forefront of reducing negative friction in this respect.
Multiple channels of communication allow firms to support their clients through every stage of the firm-client relationship. The benefits are threefold, consumers enjoy streamlined and automated processes that align with their needs, specifically across burdensome administrative activities. Firms see gains in efficiency when handling routine tasks, allowing staff to focus on more complex value-add tasks further reducing response times. Lastly, the data and information that inevitably arises from these support channels can be used in a continuous cycle of improvement for firms as they seek to improve and personalise their services across their target client base, accommodating vulnerable clients in the process.
How Grath Can Help
In this 5-part series, Grath identifies how firms can apply technology solutions to the four outcomes. In part 5, Grath will identify where firms are struggling to evidence and monitor their efforts with consumer duty and investigate how mapping Prin 2A through our GRC solution is one way to tackle issues faced.
Grath can provide further guidance on how technology helps future-proof your regulatory compliance and risk management process, we’d love to talk.
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