The Consumer Duty – T&C next steps


By the time you are reading this article your firm’s implementation plan detailing how you will meet the Consumer Duty’s fundamental principles should be finalised or be remarkably close. And, given the nature of the Consumer Duty improving customer outcomes will be at the very core.

Actions relating to the product and services and the price and value outcomes will feature, as will customer support and understanding across the end-to-end customer journey. Given the diverse readership, these plans will have different focuses and priorities, however, I am hopeful that the training and competence of staff will be a consistent theme for you all.

From a people perspective, the Consumer Duty affects everyone within the firm. It requires capable Senior Managers to ensure that the culture drivers of leadership, people policies, governance, and purpose align to support the delivery of positive customer outcomes as well as eliminate the negative ones. And, through the introduction of the new Conduct Rule, there is a greater level of expectation and individual accountability for most staff.

It’s no good to just pepper the meeting with “are you happy with that?” or “do you have any questions?

So, what does the Consumer Duty mean for T&C teams, and what practical steps can you take to get ready?
First, if you are not already part of the Consumer Duty project, make sure you are. Take the learns from the SMCR implementation where some T&C colleagues were not engaged until the latter stages.

Lots of firms approached SMCR with a “silo” mentality focussing on the technical change, the detailed rules, and the processes. For example, what did the process design need to include to ensure the new regulatory referencing rules were met? What were the process and records required to support the Fitness and Propriety assessments? Earlier engagement with T&C to also determine what should factor into the assessment of competence and capability of individuals, rather than just the process design, may have led to a more effective change.

Second, be clear on the required scope from a people perspective. I understand that the sphere of influence for those involved in T&C across firms differs. This ranges from staff whose activities fall under the TC Sourcebook, to staff in customer-facing roles, through to all staff within the firm. The introduction of the new Conduct Rule will require training for the majority. There also needs to be a focus on the staff that will implement the Consumer Duty and manage the delivery of customer outcomes on a day-to-day basis. So, do the practices of T&C need to be introduced to other areas of your business?

Thirdly, once you have your agreed people scope you need to determine any knowledge, skills, and/or behavioural gaps with the corresponding actions. To identify the gaps, you need to first establish “what does good look like?” in the context of the individual’s role and the required customer outcomes. For firms that have kept pace with expectations around customer outcomes, there is less to do in this area. However, for some, this will represent a significant shift and bring about the greatest challenges.

What does a good customer outcome look like across the different customer journeys that staff support? How will you articulate this? Take for example the mortgage customer journey – customers “need” a mortgage to buy their house, but they don’t “want” one. Dare I say some customers will say what they think you want to hear to get the mortgage? These customer conversations are where risks lie which could lead to poor outcomes. Information needs to be provided at the right time in a way the customer can understand. It’s no good to just pepper the meeting with “are you happy with that?” or “do you have any questions?”

The customer journeys, whether they be complaint handling, opening a bank account, or advising on a mortgage, need to articulate the principles to be adhered to and the desired customer outcomes to be achieved. Once these are defined and/or the outcomes reviewed you can ascertain whether any people competence gaps exist and design the appropriate delivery solutions.

Lastly, agree on how you are going to evidence, measure, and monitor the competence of the staff delivering these defined customer outcomes. What assessment tools will require updating? Will you take the opportunity to embrace the spirit of the Consumer Duty? Could you include customer feedback as part of the assessment of staff competence? Remember it is the achievement and demonstration of a good customer outcome that matters!

Now I’d like to hear from you.
What are your people priorities – reviewing training for new starters or the way your staff support and interact with customers? How will you review the standards needed to determine competence? Do you have gaps in your T&C MI?


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Lynne Hargreaves is Director at ClearStep Consulting. ClearStep specialises in the interpretation of FCA regulations and the impacts on people. This includes the design and development of TC frameworks, competence training and assessment and consultancy support for the Certification Regime and Code of Conduct.

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