Tech and Data: The Answer to Customer Knowledge and the FCA’s Latest Consumer Duty Woes
New research findings from a report by Moneyhub in collaboration with Opinium revealed that 38% of firms had no or very limited knowledge and commercial awareness of the upcoming consumer duty legislation laid out by the FCA which implied their lack of preparedness for facing it, which was an alarming find.
The report titled, “FCA Consumer Duty: Business Burden or Golden Opportunity?”, while shedding light on the lack of knowledge about these new regulations, also showcased that technology was the key to this obstacle. 48% of firms surveyed are planning to or have already invested in technology services to develop and deliver more personalised and targeted communications to their clients and customers. Additionally, 41% also have plans to invest greatly in technology to access customer data and insights.
The FCA’s new customer duty regulations are aimed at ensuring that customers receive communications from financial services firms that they fully understand. The products being offered should meet their needs, not just at the point of sale, but through the entire product life cycle, offering fair value and continuous support. Additionally, and more importantly, for FCA-regulated companies, these regulations will eventually affect firms’ books of business rather than just new business. This will prompt a re-evaluation of products that current customers are on and whether they are still appropriate.
A thorough understanding of customers is a key challenge for many businesses, without services like Moneyhub’s Open Finance providing consent-driven data insights, businesses will struggle to gain the information they need to meet their obligations under these new regulations. The report found that firms are ready to invest ahead of the July 2023 deadline, with 1 in 4 firms (23%) saying they will invest more than £5m to make the most of the opportunity.
Samantha Seaton, CEO of Moneyhub
“There are no excuses left, businesses must ensure they understand their customer completely to offer products and services that fit their circumstances throughout the entire duration of their relationship. And the only way this is possible is with an ongoing holistic view of their customer’s financial universe. Open Finance truly holds the key for firms to meet Consumer Duty. But to see Open Finance’s role as solely a solution to a problem is a mistake. It is also an opportunity.
By better understanding your customer, it means you can offer super relevant, appropriate products and services, and ultimately create stronger relationships and build loyalty. Smart, forward-looking businesses will seize this moment and reap the benefits of truly understanding their customer
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The full copy of the white paper, “FCA Consumer Duty: Business Burden or Golden Opportunity?” can be downloaded here
About Moneyhub
Moneyhub is a data, intelligence, and payments company which develops ISO 27001-certified software for Open Banking, Open Finance, and Open Data applications. Its FCA-regulated Open Data platform enables companies to quickly and easily transform data into personalised digital experiences and initiate payments. It's APIs and fully customisable platform provide data aggregation, insights, notification nudges, and payment systems. As a result, clients have the consent-driven data and analytics they need to create super-personalised offers, products, and services. Hundreds of organisations, spanning finance to media and retail, rely on Moneyhub’s award-winning technology.
For more information, please visit www.moneyhub.com