Leading user experience (“UX”) and human factors research agency, Bold Insight, has launched its Check UX: Consumer Duty service to fintech companies and financial services ahead of the Financial Conduct Authority’s (FCA) new Consumer Duty rules, which come into effect at the end of July.

The Consumer Duty has been described as the “biggest regulatory overhaul in a decade” in terms of how financial firms serve consumers in retail finance markets. One key element of the Duty is setting a standard that ensures consumers are put first. When implementing the Duty, firms must consider customer needs, objectives, and capabilities, as well as behaviour at each stage of the user journey. Crucially, firms are expected to review services and ensure that the expected outcomes listed in the Consumer Duty are met.

Simple, key changes in UX can minimise “robust action” from the FCA

Many financial institutions are not yet fully aligned with the Consumer Duty rules, which come into effect on 31 July. Even with less than 70 days to go, there is still time to make changes. The FCA has made it clear that it will take a hard line on those who do not meet the rules.

Bold Insight has identified key areas in the customer experience that firms must consider when meeting the Consumer Duty, such as:

• Considering the experience of vulnerable persons in the design of the product or services: In practical terms, this could include accommodations for physical impairments (e.g., colour blindness), learning/cognitive deficits (e.g., dyslexia), or a lack of capability to understand information (e.g., due to poor language skills).
• Reviewing the entire customer journey: For example, firms should not make it difficult to close accounts and must provide sufficient guidance for basic customer practices.
• Positioning account risks and warnings as prominently as other key information: There should be intentional “friction” in the customer journey before making important financial decisions. Otherwise, customers may not be fully aware of the risks associated with some accounts.
• Clearly disclosing where customers may file complaints or give feedback: Many customers struggle to find how to do this. This is now no longer acceptable under the Consumer Duty rule change.

Bold Insight’s new Check UX: Consumer Duty service identifies where companies can make simple changes to digital products and services that are fairer, more accessible, and easy to use, aligning with the principles of Consumer Duty. The nature of the rules and obligations set out in the Consumer Duty prioritise customer experience. By providing users with clear and intuitive interfaces, companies can improve customer experience, increasing service engagement and customer loyalty.

Dr. Robert Schumacher, Managing Partner at Bold Insight, commented: “With a short time left until the FCA Consumer Duty rules are enforced, firms are in overdrive to begin the process of adhering to these new requirements. Undergoing a review of your product’s user experience can help ensure you de-risk your company in light of the obligations of the Consumer Duty. Furthermore, this is an ongoing requirement – so improving before the deadline is important, but it’s only the beginning.”

According to the FCA’s finalised guidance: “One question all firms can ask themselves is whether they are applying the same standards and capabilities to delivering good customer outcomes as they are to generating sales and revenue in comparable areas.”

The FCA suggested that Consumer Duty will lead to a “major shift in financial services.” It is expected to set higher standards for consumer protection. Despite this, many do not feel prepared for it. For example, 55% of lenders admitted they are unprepared. This is against the backdrop of the FCA’s Executive Director of Consumers and Competition, Sheldon Mills, warning that the FCA will “act swiftly and assertively” and take “robust action” against firms who ignore the Consumer Duty.

About Bold Insight
Bold Insight is a user experience (UX) and human factors research agency. Its work spans the product development life cycle; research informs early product design to global human factors validation, all to ensure user experiences are useful, usable, safe, engaging, and satisfying. Bold Insight works with digital, next-generation technology in financial services, medical device, automotive and other industries. It delivers research-based insights to empower designers to design with confidence.