Consumer Duty: there may be trouble ahead…


Near-record low levels of customer satisfaction indicates trouble ahead for FinServ firms affected by Consumer Duty, as the Financial Conduct Authority’s (FCA) Financial Lives Survey also reinforces fundamental service failures across the sector.

In July 2023, a warning bell tolled for the FinServ sector; especially for the majority who are affected by the FCA’s Consumer Duty. The Institute of Customer Service published its UK Customer Satisfaction Index (UKCSI), a semi-annual national barometer of the state of UK customer satisfaction. And this year was exceptional – for all the wrong reasons! Customer satisfaction levels have fallen in all 13 sectors and is at its lowest level since 2015.

Coincidentally, whilst I was writing this article, the FCA published a press release highlighting the urgent need for the sector to focus on improving service and satisfaction levels. My conclusion from reading the release was appropriately summarised with this quote from Sheldon Mills, Executive Director, Consumers and Competition at the FCA:

“While there have been positive steps taken, there is still work to do – 4.9 million people who used firm communications to help them make a decision in the 12 months before May 2022 found it did not help at all.”


The UKCSI benchmarks customer satisfaction levels across 26 measures, spread across five “dimensions”. These dimensions resonate with the intent behind Consumer Duty, particularly “Complaint Handling”, “Customer Ethos” and “Ethics”. The single biggest faller was in the “Complaint Handling” dimension, and the “Ethics” dimension didn’t fare too well either. And consumers who reported to have very poor financial wellbeing scored suppliers the lowest; essentially ‘vulnerable customers’ as defined by the FCA.

Delivering lowest cost-to-serve training, ticking a box, and using this as proxy evidence of achieved and retained employee competency – and hoping the employee learns on the job – is a recipe for disaster.

The UKCSI differentiates by sector (13 sectors) but separates out banks and building societies from insurance companies – and perhaps misses a great deal of other sectors in the FinServ market.1 However, this is not a reason to ignore the data; particularly as the trend is downwards in every sector, and this is absolutely a barometer of the UK customer service standards for all firms. And – in light of the findings published in the FCA’s Financial Lives Survey – there is absolutely no room for complacency.

Thinking about Consumer Duty at a principal level, firms must deliver good outcomes to retail customers. They need to act in good faith, avoid foreseeable harm to customers and enable them to achieve their financial objectives. In addition to these cross-cutting rules, there are four outcomes.

  1. Products & Services
  2. Price & Value
  3. Consumer Understanding
  4. Consumer Support

It could be argued that customer service is at the very heart of Consumer Duty. And much of the criticism contained in the July 2023 UKCSI report focusses on how firms treat customers when things go wrong and how financially disadvantaged customers suffer the most.

“The biggest differences between the top 50 organisations and the rest relate to: satisfaction with complaint handling; price / cost; and a range of emotional and perception measures including an organisation caring about its customers, designing experiences around its customers, trust, reputation, openness and transparency, providing reassurance and keeping promises2

Products & Services (1)

If you are impacted by Consumer Duty then reading this should cause some concerns, particularly when considering the four outcomes. If one assumes that outcome (1) is the easiest and least complicated outcome to resolve and that most firms will by now have sanitised their product portfolio, removed unfair products and ensured specific products are related to specific groups of customers.

I refer to this as “desk-based” heavy-lifting, and it will have likely involved consultants or – at the very least – legal advice of some sort. The key point being is that this activity is as close to “fire and forget” that a firm is going to get. Once the work has been done, it is largely done, until new products are launched, or circumstances dictate that a given product is no longer suitable. The other three outcomes are far more complicated by virtue of their dynamic nature and all three relate to customer service to varying degrees.

Price & Value (2)

These are at the heart of the Consumer Duty. Customers want to know they are being charged a fair price and getting a product that meets their needs and adds value. Getting a fair price (even when compared to competitor offerings) for a product that isn’t what I need is completely pointless. This relies heavily on the First Line of Defence in your business genuinely being competent in role and understanding what a customer’s needs are and being sufficiently confident to speak out when this isn’t the case.

Training isn’t the answer. Well in and of itself, isn’t the answer. Many firms appear to have “trained employees about Consumer Duty”, ticked that box – and got on with BAU. The regulation is now less concerned with ticking a training box and is instead completely (and rightly so) fixated on ensuring employees have achieved the required levels of competence and retained it – and employers can evidence this at any time.

It is this “evidencing” aspect that is causing compliance professionals the greatest challenge. Just two months prior to the first implementation deadline of Consumer Duty, we asked two blunt questions to a cross-section of compliance, risk, oversight, T&C and operations professionals with regards to the competence of their people and their ability to evidence this requirement to the FCA.

Out of 246 survey respondents, 67% said that they were only ‘somewhat’, ‘slightly’, or ‘not confident at all’ that their people had the required competence to deliver against Consumer Duty.

84% of them said they were only ‘somewhat’, ‘slightly’, or ‘not confident at all’ that they could evidence to the FCA that their people fully understand their Consumer Duty obligations.3

Consumer Understanding (3) (Goes hand-in-hand with Price & Value).      

 “These disappointing findings highlight there’s still a huge gap between the help people need and what they’re getting from firms, despite recent efforts to encourage struggling customers to reach out. That includes making it as easy as possible to get in touch through a variety of channels – such as over the phone, online or face-to-face -and making sure that customers who get in touch are met with tangible offers of support.”

Whilst the UK Government sets a D&I standard of communication that all Government communications must be understood by a 9-year-old5, a great many firms fall woefully short of this standard.

Whist (some) firms have done a good job in making their communications transparent and easy to comprehend, many have not. And a great many of the employees interacting with customers – who are asking for help – simply don’t know the answers. The data point is that employees know just 54% of what they have been trained, and no employee can act on training received and not learned and retained.6

Consumer Support (4)

“The FCA found that just over a third of people believe most financial firms are honest and transparent in the way they treat them. In addition, an estimated 7.4mn people tried, but were unsuccessful, when trying to get in contact with their financial services providers in the 12 months before May 2022.  While more than 3mn people who did manage to contact a firm said they could not get the information or support they wanted.” 7

It is pleasing the survey found at least a third of the population viewed the sector as honest and transparent, but the flip side is two-thirds of the UK population believed the sector to be something less than honest and transparent! The fact that more than 7mn people tried to contact their supplier(s) and failed, and then 3mn failed to get the support they needed when they finally made contact is as big a red-flag as possible.

Accessibility is a ground-level requirement but must be aligned to accessing competent employees who can help them with their enquiry. How many times have you connected to an agent only to undergo a patronising, disingenuous conversation, that was of absolutely no help whatsoever and simply burned time from your life that you will never get back?

The UKCSI concluded that, “From the perspective of customers, the leading priorities for organisations to improve are making it easy to contact the right person to help, employee behaviours and competence, and website navigation.”8

Where the rubber hits the road

Where regulated firms are going to fall short of their responsibilities are on these last three outcomes. They all relate to serving the customer – and at the centre of customer service is competence. Employees can’t hope to provide the levels of customer service and support if they are not competent in-role.

This is different to “being trained”. The HR Director published an article I wrote for them in July 2023, looking at how failings in the employee T&C process were leading to record levels of employee attrition in the first 180 days of tenure.

The reason(s) employees were leaving during this crucial onboarding phase was that they were reporting that they couldn’t do the job they had been hired to do. The levels of strain and anxiety were too great – so they simply bailed out. It wasn’t because the job was particularly complicated, rather that the (often theoretical) training they were receiving was failing to translate into in-role, retained competence. As much as 70% of workplace learning comes from learning on the job (through peer-to-peer learning), which had also now been diluted to the point of ineffectiveness by hybrid and remote working changes, post-Covid-19.

One of the many legacies of Covid-19 is that the workplace has changed significantly, and employees’ perspectives and learning needs have also changed. This means employers need to change their approach to employee T&C because what is in place usually isn’t working. Delivering lowest cost-to-serve training, ticking a box, and using this as proxy evidence of achieved and retained employee competency – and hoping the employee learns on the job – is a recipe for disaster.

Employers, particularly those now trading under Consumer Duty, should be providing employees with individualised learning support. Support that counters the reduction or the near loss of peer-to-peer learning. Support that identifies weakness and helps the employee bridge them. Support that helps employees translate theory into the desired in-role competence and instils essential confidence in employees to go the extra mile, ask the additional questions – oh, and evidences the same for regulatory purposes.

Employers need to embrace continual assessment and deploy AI like Clever Nelly to ensure their employees possess the competence and skill to deliver against Consumer Duty and reverse this steady decline in Customer Service standards. It is no surprise, therefore, to learn that Elephants Don’t Forget is statistically disproportionally represented in the Top 50 UKCSI organisations.


  1. The UK Customer Satisfaction Index (UKCSI) 13 sectors: Automotive, Finance, Insurance, Leisure, Public services (Local), Public services (National), Retail (Food), Retail (Non-food), Services, Telecommunications, Tourism, Transport and Utilities.
  3. Elephants Don’t Forget, ‘How to successfully approach Training & Competency (T&C) under Consumer’, webinar poll, 24 May 2023. 246 professionals polled.
  6. When we initially socialise our AI – Clever Nelly – in firms to assess baseline in-role employee knowledge and competence (i.e., what individuals have learned and retained from their workplace training), the average level of employee in-role knowledge and competence is just 54%, meaning staff often only know – or understand – half of what their employer needs them to know to do their job.


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Adrian Harvey is CEO at Elephants Don't Forget. Elephants Don’t Forget are world leaders in the use of Artificial Intelligence to augment how each employee learns, retains and evidences in-role knowledge and competency. We support employee competency and compliance training of some the world’s most recognised brands including Microsoft, Vodafone, Experian, Allianz, Old Mutual, Aviva, Eon and Volvo.

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