Only a fifth of customers have noticed a change in treatment since the introduction of Consumer Duty, suggesting firms still have a way to go to realise the consumer benefits, says Moneyhub.
Research carried out by the data and customer journey platform found just 22% of consumers had noticed improvements in how they are treated as customers since the new regulation came into effect in July 2023. However, when asked about improvements to customer outcomes, 13% said firms have failed to deliver good quality support and after-sales care, while 12% said firms have failed to deliver communications that help them to make effective financial decisions. A further one in 10 (10%) felt firms failed to offer suitable products and services that meet their needs.
According to Moneyhub, 41% of customers said they still haven’t noticed any changes to their treatment.
The research highlighted a generational difference in how consumers felt, with 40% of younger respondents believing they had noticed changes in how banks interact with them, for instance, compared to just 5% of over-55s.
Despite this, many customers still expect Consumer Duty to have a significant impact on firms’ behaviour. Over two fifths (42%) believe that Consumer Duty will have a positive impact on the quality and range of products and services available, rising to 53% among younger respondents. Meanwhile, 40% think that Consumer Duty will have a big impact on customer servicing and 36% think it will drive banks to become more customer-centric institutions akin to building societies.
With the deadline fast approaching for financial services firms to apply the Consumer Duty to closed products, Moneyhub said firms “still have work to do to realise the business and consumer benefits” of the Consumer Duty.
Dan Scholey, COO of Moneyhub, said: “Consumer Duty really should be a win for both businesses who want to work more efficiently and effectively as well as consumers who need more tailored solutions at affordable prices. The early feedback from firms that have embraced it is overwhelmingly positive. However, with significant fines now being imposed by the FCA, we have both the stick and the carrot in place to see better outcomes delivered.”
Scholey said firms should start with data, with the UK making great strides through regulation to make the data available.
“With it, firms can cost effectively understand an individual’s needs and provide the right solutions at the right time. Embracing the use of third-party open data solutions is the best way for firms to meet Consumer Duty requirements while seeing a tangible impact on their customers’ day-to-day finances and satisfaction levels,” he added.
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