The FCA commissioned Ipsos to conduct a Consumer Duty Survey in Spring and Autumn of 2023. The survey aimed to measure how well firms are delivering on the consumer outcomes set by the FCA.
The survey covers various aspects of the consumer duty, such as consumer understanding, product design, customer service, and price and value. The latest survey, conducted in Autumn 2023, focused on 600+ firms that had not been surveyed before, mostly small and medium-sized businesses.
The survey is a valuable tool for monitoring the progress and challenges of the Consumer Duty, and for providing feedback and guidance to all firms.
We’ve picked out highlights centred on Outcome 3: Consumer Understanding. In our experience of working with and engaging with firms, we’ve found this outcome has had the least amount of focus from firms.
The survey results revealed that most firms (88%) have completed or are assessing the end-to-end customer journey, which is a key component of consumer understanding. However, more than half of the firms (56%) have not amended or withdrawn their customer communications in any way following the review, and a fifth of the firms have not reviewed their communications at all.
This suggests that there is a gap between the assessment methodology and firms’ findings. This is confirmed by two slightly contradictory findings in the report.
The survey found that more than half of the firms (55%) have made changes to their new or existing customer contracts, which could indicate a positive impact of the consumer duty on the contractual terms and conditions. However, the survey showed that two-thirds of the same firms made no changes to their marketing strategies for these products, which could imply that a holistic view of Consumer Duty has not been considered.
Finally, on a concerning tone, a quarter of retail finance providers surveyed have not assessed the needs of consumers with characteristics of vulnerability or do not think it is relevant, which could highlight significant shortcomings in meeting intended Consumer Duty outcomes.
The survey results suggest that there is still room for improvement in how firms meet the expectations of the FCA and consumers, especially in the areas of consumer communication, vulnerability, and marketing.
