A UX checklist for FCA Consumer Duty compliance

Take a look at ways user research can help your Consumer Duty compliance efforts in 2023 and beyond.

In May 2021, the UK Financial Conduct Authority (FCA) formally announced its new Consumer Duty - a set of rules designed to provide better outcomes for retail customers, particularly when purchasing financial products, but with wide-ranging implications for businesses in almost every consumer-facing industry in the UK.

From our team’s own conversations with a number of financial services organizations, it seems fair to say that there is certainly a mix of preparedness among teams.  

As mentioned, while the Consumer Duty is the largest regulatory overhaul within Financial Services of the last decade multiple industries, products, and services will need to conduct a large-scale review not just at the product level, but also across their marketing, customer services, and digital operations. 

For anyone unfamiliar with the Consumer Duty, it can be boiled down to four key outcomes that organizations must deliver on:-

  • Fair value: Consumers receive fair prices and quality 
  • Suitability and treatment: Consumers receive suitable products and services and receive good treatment 
  • Confidence: Consumers have strong confidence and levels of participation in markets 
  • Access: Ensuring diverse consumer needs are met

Given the reasonably loose wording and possible implications, ensuring all these boxes are ticked can be a daunting prospect, but the process need not be onerous.

Rather than a wholesale ‘lift and shift’ approach, the most pragmatic approach for most businesses will be a review of existing messaging and legal agreements, followed by a program of user research across each product and messaging framework in turn.

This will allow continuous improvement (The Kaizen philosophy that we also subscribe to at UserZoom), and ensure that compliance can be implemented in a manageable, structured way without undue disruption to existing operations. 

Beyond this, a properly implemented testing cycle can be built into each process, ensuring a templated, repeatable and measurable approach that will continue to provide ROI in the future. 

One of the most important takeaways is that a high-quality, accessible experience is no longer simply a ‘nice to have’. It is now business-critical and regulated. Businesses must offer - a positive experience for both current and prospective customers and users.

How to meet and exceed the consumer duty ahead of time.

Implementation of the Consumer Duty is required by the 31st of July, 2023, so timelines are tight for such a major project. However, there are a number of ways businesses can positively act and position themselves to complete delivery. 

What are the key deliverables?

The Consumer Duty requires four key deliverables.

While they may initially seem daunting, we can break the process down and tie each to a particular facet or type of user research.

1: Ensuring communications are simple and give customers the information they need to make good decisions

If we start with the sales process, then this deliverable becomes a concern for your marketing department (although we certainly aren’t forgetting legal documentation). Aimed at ensuring both marketing copy and sales collateral is aligned and produced in an accessible, easy-to-understand manner.

Beyond this material, you may wish to conduct a more extensive review to ensure that any additional comms material is covered - this might include automated onboarding emails, technical or legal copy, or even short-form instructional copy on your website.

You’ll also need to consider ongoing communications.

For example, the majority of working adults in the UK will have a long-term invested product; A pension. They should ideally be reviewing this regularly to ensure it is invested in a way that suits their needs.

Those needs may change over time, so the onus is on the provider to ensure those communications are clear and easy to understand. This would also be true of cash savings, invested products, and even financial implications around certain insurance products. 

When implementing changes, businesses will need to remember that communications go beyond text, with images, sound, video, and even your customer journey mapping all contributing to the impression and expectation of the customer.

By moving beyond traditional methods such as A/B testing, and instead running more advanced multivariate testing, it is possible to receive feedback at scale on particular elements.

Depending on the range of products, services, or journeys offered, automated participant recruitment can ensure you are receiving enough feedback to ensure reliable data from a wide range of users.

2: Designing products in a way that enables terms to match needs

We’ve spoken extensively in the past about the value created by integrating user research into the entire product cycle, and that includes design.

In fact, our 2022 State of UX report found that digital experience teams that consistently integrate user research in product development report a positive impact on customer satisfaction (80% to 50%) and brand perception (76% to 45%), compared to those that don’t - a margin change of +30 points! 

UX has a powerful impact on business goals across the board.

3: Ensuring customer service is proactive, and helpful and makes it easy to register complaints or switch to a more suitable product or service (including from a different supplier)

There is a particular focus here on the different needs of customers including vulnerable customers who are more at risk of harm. Again, customer feedback is your ally here. Accessibility testing, combined with regular, ongoing customer surveys can help identify key channels that your customer service needs to be active on. 

More importantly, it will allow you to analyze the journey paths customers need to take to register feedback - positive or negative, to make them as frictionless and effective as possible. 

4: Price products and services in a way that reflects fair value, without excessively high fees

Finally, we come to price and ‘value’, which can be a subjective term at the best of times. In any dispute, the most effective response is a root cause analysis of complaints received.

A response from a single customer may be simply bad luck, but if you can uncover similar themes and issues from a number of customers through your user testing, it becomes much easier to address and fix any problems. 

Evidence and Measurement

Of course, implementing user testing and acting on the feedback you receive is just part of the process. You’ll also need to think about ways you can measure impact and - perhaps most importantly when reporting to a regulatory body like the FCA -  evidence your work.

Fortunately, there are a number of tools and existing frameworks you can use, each providing a clear view of particular aspects of your testing and implementation.

Research repositories: 

A research repository acts as a ‘single point of truth’ for all of your research, and allows you to share the insights you’ve gathered across multiple teams. 

These have value for many reasons - not least reducing the amount of duplicated testing which can occur otherwise - including freeing up time for your research team to concentrate on more strategic projects, something that is imperative if you have a number of products and services to address.

If the need arises to defend against challenges from a regulatory body, then a repository is a perfect way to evidence completed work, as well as live projects.  

Using QXScore to measure progress:

While a number of frameworks exist, let’s take a look at our own QXscore initially, as it combines a range of metrics and measurements you might typically focus on.

At UserZoom, we realized that behavioral (What users do) and attitudinal (How users feel) metrics are often recorded in silos, meaning it can be hard to see the bigger picture - For example, you may know that users don’t click a button on your website, but you can’t tell why not - so we built QXScore to help you tie your numbers together and identify wider issues.

Without using both types of measurement, any updates will essentially be guesswork. Does the copy need changing? The color? The positioning… or the entire journey to that point? 

The UserZoom QXScore

This type of measurement is useful because it can be used to justify particular decisions, but also to show that your entire business is on a path to better overall customer experiences and outcomes. 

A UX checklist for FCA Consumer Duty Compliance

Further considerations

For UX design and research teams, The Consumer Duty can be seen as a tremendous opportunity.

It drives forward the argument that ongoing user testing and measurement is a key component of a modern business, and a path to standardized measurement that ties more closely to overall business outcomes.

Choosing the correct testing platform is a hugely important part of the journey to compliance, but beyond this, consultative input can also have a big impact. 

Teams across the business will be affected by the Consumer Duty, so ensuring they are receiving good advice from a trusted source, and have access to ongoing training to help them conduct and understand the results of research is imperative.

Again, while getting this in place in order to meet a quickly approaching deadline may seem daunting, it’s important to remember that you are not alone in this.

There is plenty of guidance available, and if approached properly, this can be a golden opportunity. The time has never been better to develop a robust testing process and become closer than ever to your customers. 

How are you set up to meet the four outcomes by July, 2023? Get in touch if you’d like to schedule an assessment of any current gaps with one of our team.

Create experiences to engage, convert, and grow your audience

Make customer-centric decisions at every point in the digital customer journey