Secret Diary of a Consumer Duty-ist

A few mornings ago my dad peered over his paper to ask how work was going. 

Though I doubt he wanted more than a one-word answer, I replied with, “Goodish, yep. It’s almost Consumer Duty implementation deadline day… I feel like I’ve been running on a hamster wheel for about a year.” 

As with most things I say to my dad, he’d not listened to the end of my sentence because he was already taking umbrage with the beginning.  

“There’s a day for everything these days,” he grumbled as he slumped back into his broadsheet. 

Perhaps he’s right.  After all, it is ‘national wiggle your toes day’ on 6 August. 

But 31 July is a big day for many of us working on vulnerability in financial services. Although the implementation deadline is in no way the finish line, it does give us a good opportunity to take stock… and then, finally, some holiday. 

The Consumer Duty sets clear standards of consumer protection across financial services. It represents one of the biggest regulatory opportunities in recent decades to improve the lives of customers in vulnerable circumstances.  

It wasn’t hard to think of the highlights as I reflected on the progress the Mental Health Accessible team has seen over the last year. To share just a few:

It’s been encouraging to see some firms getting better at explicitly considering vulnerability in the design process for products and services. People experiencing mental health problems often struggle to navigate processes and often receive a poorer deal because they don’t have equal access to financial products. Proactive design steps help mitigate harm for vulnerable customers and allow them to get the same positive outcomes as non-vulnerable customers.

We’ve also seen firms commit to making changes that will be transformative for people with mental health problems. For example, enabling customers to engage with specialist teams via a digital channel, rather than only being contactable by phone.

And we’ve seen swift action of the implementation of guidance on such topics as improving communications. In one case, we delivered a set of communications principles to a firm at the start of 2023. Within weeks, these were being absorbed into brand guidelines and training for staff working on communications – right from those designing and writing them up to those signing them off.

It’s not a stretch to say that was a personal highlight of the year – a fact that should cement your understanding of why my dad’s attention wanes after just eight words from me. But his ears do tend to prick up for a bit of argie bargie – and it’s not all sunshine and rainbows.

In the face of uncertainty over The Duty, there’s been discussion over whether firms will opt for a safety-first strategy. With the outcomes-based approach of the Consumer Duty, putting ‘belts and braces’ type rules in place is not in the spirit of the change the Financial Conduct Authority (FCA) is trying to achieve and will likely blunt positive impacts for consumers. 

On 18 July,  the Information Commissioner’s Office (ICO) and FCA pointed to this theme in their joint letter to firms, encouraging proactive action and assuring firms that data protection regulations do not prevent them from telling savings customers about better deals. 

Firms requiring such a late push to proactively communicate with customers is disappointing but perhaps even more worrying is the number of customers who have decided to reach out to firms but didn’t get anywhere. Last week, the FCA published its Financial Lives Survey, which found that 7.4 million people unsuccessfully attempted to contact one or more of their financial services providers in the 12 months before May 2022, with the most vulnerable in society most likely to struggle with this.  

Another disappointment is firms not taking enough meaningful action to involve people with lived experience in their Consumer Duty work. Over the past year, we’ve engaged with a diverse range of firms, and the concept of lived experience is frequently raised during our discussions – often met with optimistic nods and statements along the lines of: “We’re currently exploring the best approach,” “We’ve done a bit of it” or “We intend to address it in the upcoming sprints.” 

The inclusion of experts by experience is critical if firms are truly going to improve outcomes for consumers. The Duty is, after all, aimed at protecting them and ensuring they get a fairer deal.

We don’t have all the answers – and we still have questions. 

For example, over the past 18 months, there has been a general trend toward firms collecting data on customer support needs rather than vulnerability type. This shift in thinking toward needs moves the conversation on, away from the situation the customer is facing, and onto the impact that is having and the help the customer might need in relation to their finances and banking. Conflictingly though, we also know that in order to understand the experience and outcomes that members with mental health conditions receive, strong monitoring is essential. 

And that the Duty requires regulated firms to demonstrate that “the outcomes of vulnerable customers are as good as those for other customers” (FG21/1, paragraph 1.3). To make such comparisons, firms will need to consider whether future data recording is also able to include the underlying cause or driver of a member’s vulnerability.

In snowball fashion, this question then brings us to a myriad of complexities around data – which I won’t even attempt to address in this already beastly blog!

As a result of appetite and need our Mental Health Accessible team has grown. We continue to provide bespoke consultancy and our flagship programme, the Mental Health Accessible accreditation, which Lloyds Bank, Halifax, and Bank of Scotland hold. However, we recognise that firms need support with implementation and access to lived experience. 

As a result, we have introduced our new Impact Programme, which offers an ongoing relationship with Money and Mental Health and includes regular consultancy, lived experience testing, and feedback from customers in vulnerable circumstances.