- Greater clarity needed on measurement mechanisms to aid performance monitoring and benchmarking
- Unintended consequences for good firms
- Financial services firms tend to provide a better customer experience than non FS
- Employees, and in particular senior managers, overestimate how well they are doing
Investor in Customers (IIC) the independent customer experience and insight business has responded to the recent FCA Consumer Duty Consultation highlighting the need for greater clarity on how firms are expected to measure and report on the levels of customer care and overall experience that they deliver. While it welcomes proposed improvements in the standard of care that firms are expected to provide to consumers, through the introduction of a new Consumer Duty, it warns that there is a danger that nothing will change if there is no measurement mechanism.
IIC also warned of the potential unintended consequences for those firms that already provide high levels of customer care and customer experience. Although these firms are likely to continue to perform well as it is part of their culture adding additional layers of regulation may impede their performance whilst those that are less focused on the customer and their duty of care, may struggle to make the changes necessary to improve their performance.
John Moret, Chairman, of Investor in Customers said: “If we start with the premise that what gets measured, gets done, then the FCA needs to provide a framework for financial services firms to measure their performance in placing their customers interests at the heart of their business. If this was in place, then firms would be able to quantify and benchmark how well they are performing across all four outcomes highlighted in the consultation paper.
“In our experience, financial services firms often outperform those in other sectors when it comes to the various aspects of customer experience such as those affecting the four outcomes highlighted in the consultation paper. However, the results of our many assessments of financial services also show that employees and in particular senior managers frequently overestimate how well their firm is doing when compared with the results fed back from customers. Whilst the impact and extent of regulation and accompanying guidance within the FS sector clearly influence behaviours, successful firms appreciate that focusing on customer needs and outcomes is essential and should be undertaken because it is the right thing to do – not simply because you are told to do it.
John concluded: “For the Consumer Duty proposals to be effective, and truly make a difference to the standard of care provided by financial services firms, taking into account their specialism and size, it is essential that consistent measures are used across the industry. It is important to ensure that all firms are clear on how they are to measure their success at meeting the four consumer outcomes. Peer pressure will be a key driver of improved performance and transparency of the results of measuring this performance will be vital.”
