In case you hadn’t noticed the new Consumer Duty has gone live in the UK. I was away when this happened and since coming back I have been taking some polls around how people feel, 2 weeks in.

Before launch there certainly was plenty of fanfare (and resources to help), a pressing deadline and chorus of doom and gloom above the wrath of the FCA that would descend on August 1^st…. yes I was guilty of this too!

However, with hindsight, and as ever with these things, it was just a day like any other. No great activity, no big announcement, just new regulations that simply became new rules.

So was Consumer Duty another Y2K, another GDPR?  and was this, with hindsight, actually just more TCF anyway? (answer… still no)

Consumer Duty – what was that all about?

Well, there is a lot to be said about taking a couple of weeks out to see the bigger picture.  

Sometimes it is just all too easy to be so close to the detail, that we lose perspective on what is going happening at a wider scale and with longer timeframes. Looking back the reality seems to be this. 

Consumer Duty is new regulation. It has been widely trailed by the FCA, so there is no excuse not to know about it.

It is a new tool in the FCA regulatory toolbox, simply giving them new powers, and measures, for enforcement.

Nothing has really physically changed at the end of July and there never was going to be a massive event… just quietly, almost silently, new regulations came into force (yes a bit like GDPR).

These new regulatory tools may not be used today, tomorrow or even sometime soon. But expectations have been set, they will ultimately have far-reaching implications, and it is now fully available if needed…

Martin Lewis, someone never short of a word around Financial Services, I thought had a very balanced comment  “I’m supportive of the principle but wait to see how the reality plays out”.

The new @TheFCA Consumer Duty comes in for all financial firms (banks, insurers, card firms etc) today hopefully upgrading rights from “being treated fairly” to “customer always comes first”

They now must proactively look after customers. It should mean things like leaving their…

— Martin Lewis (@MartinSLewis) July 31, 2023

So even if you are not ready, you know there is more to do, you may still have time.

After all you may not be asked straight away. However, you will need to be ready for when that day comes.

It may seem quiet now, but once the first couple of high-profile cases are raised (after the summer holidays?) it will be back on the board agenda again.

So from my discussions last week… these are the gaps people are working on…

Evidencing good outcomes and MI

Critical going forward and something most firms, if honest, are not really well set up for. There is a lot of interesting work to understand this properly, gather good data, and go beyond the usual quality measures and KPIs being used today (which are not really good enough longer term).

Sludge practices

I always felt the cross-cutting rules were the most interesting area in consumer duty, with sludge practices falling under here. Let’s face it, what was considered, albeit sharp, standard business practice for some will now be accused of being sludge practices (if they are not explicitly already).  Expect this to be a big battleground of change – it will run and run, especially with examples being highlighted in the media – good to get ahead of this one.

Fair Value Assessments

What is fair value, how do we measure this and make sure this is embedded across all products?  Looking at insurance rate increases for example, recently in the news, you wonder if this will evolve into a new lever to control and review prices, at least for regulated firms… and will this will spread eventually to other sectors in light of inflation… food pricing fair value anyone?

Vulnerability management

This, as we know, has been high on the agenda for a while and much good work has been done. However, definitions are aligning, expanding and there is plenty of talk of new areas such as financial vulnerability too… it is becoming ever more greyscale than black or white. Firms are needed to adapt to this, in process and communications.

The world continues to rotate

So in short… the world has not ended, but the hype is over and it is now BAU. Yes it is less sexy, but we are now in day-to-day execution mode and there are still plenty of things to do…  

So, I suppose in between festivals, dodging the rain and the odd vacation it is time to put our heads down and get on with it… some of the elements will be pretty interesting and rewarding to put in (esp the data elements from my point of view), so something to look forward to when we are back.

Have a good week everyone.

It can be difficult coming back especially straight after a couple of weeks away. 

There’s the bulging inbox, outstanding admin tasks, and that nagging feeling, “Yes I really should have mowed the lawn before I went away”, all added to the pressure to once again move at speed, the pace of the herd, now you are returned.

However, the change of scene can also be a welcome breath of fresh air. Having a couple of weeks (rather than only one) gives the time to actually go places too.

So this year, after what has been a 10+ year hiatus, I have just returned from a trip to India.

And although I thought I knew what to expect, I was blown away by the changes since my last trip. Still friendly and generous, with great food, however now also

• Generally much more prosperous, new buildings and infrastructure – including now the ability to be able to attempt to build your own furniture, with IKEA just opening in Chennai
• Mobile phones everywhere – everything is converting to online, from ticket offices to road tolls, you need to have a phone (and data), it is a must-have, and everyone had one
• Cash and use of cash is declining – everywhere was either pay by card, phone or QR code, Paytm

One of the great things about India is being able to also more easily chat with people, finding out a little about what was going on in their local community in terms of themes and trends.

• The impact and fallout from the lockdown and the pandemic is still being seen, even today.  This really is a common bond across humanity, it seems. We have all found it hard and are still in recovery
• The weather feels different.  Too wet or too hot, 2023 is a different weather year than many could remember
• Prices are going up. Inflation is increasing and people are finding the cost of food and fuel increasingly absorbing more of their budget
• Looking at the number of ‘for hire signs’ across businesses, and my straw pole, it appears there is also a labour shortage
• And lastly, I also got a sense of a general sentiment of dissatisfaction.  Whatever the issue; the government, local issues, or personal politics, there is some disillusionment – like norms previously taken for granted have been shattered, the feeling of order and certainty altered.

The similarities of these experiences with many I have also heard in Europe and North America were really quite striking.  I could have written this about almost anywhere. 

For good and bad, it does feel like human society is converging. Are we, becoming more similar, than less? It seems so. It does feel increasingly easier to relate to people where ever they live or are from.

And, whilst I also loved the quirky individual differences between countries, it does feel these are becoming smaller all the time. There are big societal tectonic forces at play here, ones that are going to be almost impossible to stop.

Yet, this convergence does have a big silver lining.  As differences fall away we understand each other better and in our markets, what works and does not. 

With a single state in India being the size of a major European country, and nearly 20% of the entire world’s population living there already, this could be a vast source of ideas for everyone, an opportunity for sure…. time to revisit China and Brazil next 😊

Have a good week everyone…. it’s good to be back

This weekend a summer storm was forecast, dire warnings across the news, wind, rain… and of course I was booked to go camping.

So, driving down Friday the mood, like the sky, was pretty dark just thinking about the weekend ahead.

I was certainly not looking forward to putting up the tent in the driving rain.

Yet, snuggled down in the sleeping bag, warm and toasty, listening to the wind howl and rain dance on the canvas, I did have plenty of time to reflect on the week.

Creating good outcomes

Consumer duty is of course just around the corner. The changes are now pressing, although, in reality, nothing will change on the 31st, except our ‘new’ way of life will start. The new lens to look at all our business processes through will now be mandatory.

The bad weather this weekend got me thinking about the nature of good customer experiences and outcomes. Can you have good outcomes even in the face of adversity?

Now of course being stuck in a tent is in reality only a minor and temporary adversity and discomfort, especially when compared to some of the difficult life situations many people can face sometimes.

However, was there anything to learn about adversity and outcomes from these situations that could aid me in thinking about design principles to help?

What worked?

Certainly, despite the weather, there were laughs with friends, games, and good food… also the delight of an on-site coffee shop with warm, dry, comfy chairs, serving good coffee and a parade of cheesecake every morning… all of which took the edge off the 5 am dawn chorus and sodden conditions.

So although at first, it seemed grim, having a familiar process, one that was supportive, made easy and topped off with some excellent well thought-through customer service… really helped.

It may not have stopped the rain or weather but did help generate a good (or at least better) outcome.

Lost in Translation?

So, will these same principles work at the office too… something to guide us as we move into this new consumer duty environment… they certainly seem sensible.

Lived experiences are a powerful thing, helping you understand and empathise (it is one of the reasons we all need to talk and try to understand the full diversity of people from all over – it’s important).

However sometimes lived experiences, situations, and conditions don’t exactly match and can be hard to find.

Yet, if you look carefully, even in some of the simplest personal experiences, there can be principles and learnings that can help… you just have to look and listen in the right spots.

Who ate my cheese?

The only slight downside this weekend… caramel cheesecake, chocolate cheesecake, and lemon cheesecake… 2 days was just not enough time to finish the trinity…

I suppose that is the definition of leaving the customers wanting more… so maybe another article for another time… although maybe another good outcome that I did not have all three!

Have a good week everyone.