Recent research from Simplify Consulting found that almost half of customer communications are not properly read and in 16% of cases, not read at all.
The Consumer Understanding outcome under Consumer Duty requires robust testing of customer communications and in some cases, firms are struggling to get to grips with this outcome.
Through our engagements and recent conversations with firms in the market, FourthLine have identified some common challenges with achieving this outcome.
- Stakeholder engagement and gaining the necessary buy-in to conduct testing is proving difficult. Capacity is an ongoing issue with significant numbers of competing projects. However, some firms have struggled to articulate the importance of testing communications and the positive impact that testing will have on improved customer engagement through more targeted, relevant, and clear communications.
- Many firms we have spoken with do not have a communications universe, i.e., a comprehensive list of all customer communications. This means they are not able to risk assess all communications and track and test high risk customer communications.
- Most firms are not fortunate enough to have a centralised communications function. This means that customer communications are often inconsistent, where they have been written by different people across different functions with different needs. This has created significant inconsistencies in quality meaning that some communications are not clear to customers and in some cases may not be compliant with the requirements of Consumer Duty.
- A knock-on effect of no centralised communications function and no communications universe is that liaison and co-ordination of the different people and departments is time consuming for the people responsible for achieving this outcome.
- In many firms, customer journeys have still not been mapped. Failing to map customer journeys means that firms are unable to test the appropriateness of the process at each journey step; understand if the product or service meets customer suitability requirements; identify if the journey contains appropriate friction; and if customer suitability objectives are being achieved.
For firms requiring additional support to achieve the Consumer Understanding outcome, FourthLine have developed a robust testing methodology and associated playbook.
Our testing method and playbook helps firms to:
- Assess high risk and low risk customer communications
- Assess communications severity to determine the required frequency and depth of testing
- Provides a tiered, risk-based view on customer communications
- Contains suggested metrics that firms should be monitoring on an ongoing basis
- The method can also be used to assess customer journeys, helping firms to identify high risk journeys that may require more regular and more robust testing
