The FCA’s Consumer Duty guidelines come into effect on the 31st of July. Customers are, and always have been, at the heart of financial services offerings, so there’s no need to shy away from the new guidelines. However, proving compliance is the new challenge. How can firms prove that they have sufficient measures in place to deliver the best possible customer outcome?
The answer all comes down to the data. We witnessed rapid digitalisation across the sector as a whole on an unexpected scale as a result of the pandemic, when most services had to go online. This means the amount of data held by banks on their customers has also never been more extensive.
Whether data is held on email or handwritten notes, a personal drive or firm-wide system, how it is handled and managed is crucial, not only from a data protection standpoint but also to help banks best serve their clients and comply with the FCA’s regulation.
Structured vs unstructured data
The quality of the service any bank will be able to provide to the customer ultimately rests on the quality of the data they hold. Without having control of their data in one secure, centralised place, it is impossible for firms to put the customer at the heart of their operations. This means that good data management is vital and, at present, unstructured data is the main stumbling block standing in the way of this.
Data can be categorised as either structured and unstructured. Structured data can be read by a machine and can therefore be used to provide data-driven insights for effective decision making.
Unstructured data is anything else, including data that is not detectable by technology such as letters, PDFs, emails or even notes from face to face meetings. Currently it is estimated that by 2025, 80% of all data globally will be unstructured , which goes to show just how rife this problem is across businesses. If banks are to fully comply with the Consumer Duty and continue to put customers at the heart of their operations in an increasingly digitised world, they have to address this issue, and fast. Moreover, any cross or upselling opportunities require the availability of the right products to the right customers at the right time, something which is only possible with accurate and up-to-date data. Learn more about unstructured data with our exclusive on demand Pigsty to Piggybank webinar.
Providing solutions
Ultimately, the data banks get out will only be as good as the data they put in. If a repeat customer approaches a bank for advice, providing the best service means knowing what products they already have, what their situation is and what might be the best step going forward.
Implementing a robust data strategy that organises and stores such data in a way that makes it transferable across an entire bank for relevant stakeholders to access is the key and there are tools available that help firms do this in a cost effective and efficient way. Dufrain’s ControlTower is an unstructured data accelerator that can be implemented in seconds, for example, which keeps on top of the housekeeping whilst assessing and mitigating risk too. Tailored communications are vital to providing the best customer outcomes and access to strong data insights which provide information on customer behaviour will help banks to deliver this.
The work doesn’t end with July’s deadline, however, it is merely the start. To ensure business keep on track with their journeys and continue to meet the FCA’s requirements, they must factor in ongoing reviews and be on the front foot with the necessary adjustments if they are to remain compliant from August and beyond.
How can Dufrain help?
Dufrain is well-positioned to support businesses in their efforts to comply with the Consumer Duty regulation. With several engagements ongoing in this area and being technology-agnostic, Dufrain can assist businesses in refining their requirements and establishing robust reporting mechanisms. Their expertise in requirement gathering, project management, data engineering, business intelligence development, and MI ensures a comprehensive approach to meeting regulatory obligations.
By leveraging our expertise, businesses can gain valuable insights into their customers’ behaviours, preferences, and needs, enabling them to enhance their offerings and meet the Consumer Duty requirements effectively from July 2023 and beyond.
Discover the impact that Consumer Data has on data in DataIQs article.
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Meet Consumer Duty requirements today
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