Consumer Duty — An opportunity for Financial Services firms to rethink their data strategy and gain true insights into their customers

In this third blog, Harris Drosopoulos, Experience Strategy Lead at Zone, highlights the importance of data and insights for all firms across the customer’s lifecycle. He outlines the five crucial steps firms must take to use data and insights effectively, not only to comply with Consumer Duty outcomes, but also to drive customer-centric change.

This is part 3 of a 3 part series, unpacking the 3 key themes from our in-depth point of view on Consumer Duty.

Consumer Duty has set high standards of care that firms must provide to customers and asks firms to take ownership of customer outcomes. These outcomes will cause firms to rethink how they are going to gather and use data. This provides a significant opportunity for firms to make more informed and strategic decisions on products and services.

You have possibly already read our first two blogs. The first extolled the importance of customer relationships for firms who would like to drive exceptional experiences. The second hones in on the power that customer centric employees have to set the quality of those relationships.

Data and insights must be the foundation for powering Consumer Duty changes

The FCA will be expecting firms to closely measure and evidence customer outcomes as part of Consumer Duty compliance. But to truly succeed and gain a competitive edge, firms must take a strategic approach to what data is captured and more crucially, why.

1. Review existing data strategy and identify gaps

Firms are likely to already have a data strategy in place. However, the outcome-based model the Consumer Duty demands drives the need for more considered and actionable insights. With this in mind, firms must review their existing business metrics and KPIs.

In order to drive real business value, firms will need to ask themselves:

- What do we want to know?

- Why do we want to know it?

- How do we analyse, present and keep track of it?

It’s important not to lose sight of the real reason to gather insights, which is to develop a deeper understanding of customer needs and pain points.

We have developed a Consumer Duty assessment framework to help firms identify gaps in their end-to-end customer journey and apply it to their data strategy. This can be found in the Zone’s Consumer Duty point of view (link).

2. Define the right combination of data and insights

Firms should combine existing customer metric data sets with customer research and user testing to create and update measurement frameworks and data reports.

Qualitative customer research is hugely beneficial for firms to be able to gain a holistic perspective on how their customers are using their products and services, and what their motivations and challenges are.

Firms should also be mindful that what customers report and how they behave are not always the same. There are many occasions when customers will not report a problem or an issue they came across and as such, complaint reports will not always give you the full picture. Watching how they approach and use products through customer testing can often reveal useful insights too.

Another important action is to create reports that monitor customer profiles and outcomes along the end-to-end journey, allowing firms to quickly identify customers whose circumstances have changed, which may mean the products and services they have signed up for are no longer the best option for them.

3. Join up data streams into one comprehensive strategy

Firms must look at how they can join up data and insight sources and apply them to their data strategy.

A joined-up data and research approach should also be the foundation for driving strategic content decisions, showing where to put focus and align on effective KPIs for driving change.

As part of this, firms should start thinking about what good (and poor) outcomes look like for customers interacting with their products and services and establish existing or new metrics and data points needed to help identify potential non-compliance of Consumer Duty outcomes.

We have created this flow chart to help firms think systematically about how to approach their data strategy. This, in combination with our assessment framework mentioned in our Consumer Duty Point of View, will support firms to review and update their existing data strategy.

4. Consider data sharing with distribution channels

For data to be viewed holistically, it is important to have a consistent and transparent method for sharing data across teams and channels. This will be particularly pertinent for firms in a distribution chain, such as the mortgage industry. While Open Banking has made doing this easier, it does present challenges including GDPR, data privacy, data storage and access.

Firms should continue to own the responsibility for ensuing good outcomes for customers by tailoring the product and services to their needs even if they are sold through external or third-party distribution channels.

However, they will also need to work with others in the distribution chain to understand and assess data and insights and create a standardised compliant approach to accessing and sharing different data sets.

5. Test data hypotheses to identify best options

Before making any changes based off data, firms should test different hypotheses to identify the best option for customers.

At Zone we can help you run a 4-week accelerated process that can provide you with the insights you need for successful hypothesis-testing.

Overall, we believe that for firms to truly succeed in this area, they must consider the following:

- How the metrics they choose can help them support the Consumer Duty outcomes

- How they can take a proactive and comprehensive approach to generate insights

- How they can monitor performance and customer outcomes based on the selected KPIs

If you would like to get further insights into our Consumer Duty point of view and our assessment framework, don’t forget to download the Zone’s Consumers Duty point of view here.



We write about customer experience, employee experience, design, content & technology to share our knowledge with the wider community.

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We write about customer experience, employee experience, design, content & technology to share our knowledge with the wider community.