Employee Expectations & Consumer Duty Compliance

By Emily Berridge

“Understanding employee expectations helps with Consumer Duty compliance”

Our recent article explained that taking an expectations-based approach to the changes required by the Consumer Duty (CD) will set you apart from firms adopting a minimal compliance approach.

But it’s not just about your customers; understanding the internal changes required to ensure compliance with CD is equally important.

If you’re going further than others in your approach to compliance, you’re probably familiar with research demonstrating the strong link between good customer experience (CX) and good employee experience (EX). If you have problems within your workforce, it’s likely that your CX is also suffering. As part of your CD planning, you need to know how well your firm’s EX strategy is currently performing. Without this, you’re missing a critical element from your CD project and this will undermine other aspects of your implementation plans.

The July deadline is looming.

Going beyond minimal compliance is not only good for business; it’s also good for your workforce too. Understanding expectations is the key (both for customers and employees). Knowing what your employees’ ideal expectations are, and how well you are performing against them, provides added insight to inform effective action plans. This will demonstrate to the FCA that you’re focused on both external (consumer) and internal (employees and operations) activity to ensure CD compliance. The two are inextricably linked.

According to recent research by Aon, in its 2022-2023 Global Wellbeing Survey, improving employee wellbeing, workplace culture and climate can increase company performance by up to 55%. The link between a good EX and a good CX is also well-established; 85% of companies in this study showed a positive link between strong employee engagement and happy customers.

According to the FCA guidance on CD, firms will need to ensure that ‘acting to deliver good outcomes,’ is central to your firm’s culture, particularly in these areas:

• Purpose – your firm’s purpose should prioritise the consumer and your staff should understand this; this requires you to define what it is and communicate it to your staff.
• Leadership – your leaders should be committed to making consumer needs central to your business and this should be evident in your existing leadership competencies.
• People – delivering good outcomes for customers should be reflected in the way in which people are developed, managed and rewarded.

Furthermore, your people should be empowered to speak up when this isn’t the case.
Using our expectations-based approach will help with CD compliance in several ways:• It will provide a current snapshot of how ready you are for the July deadline.

• It will identify and prioritise areas for improvement.
• It will provide the FCA with evidence of an effective strategy to deliver improvements in line with CD.

Compliance with CD is not just a legal obligation; it’s an opportunity to excel, to go beyond compliance and reap the benefits of a good EX at the same time.

In the marketplace, “the war for talent” is raging. Building stronger relationships with your employees can deliver a genuine competitive advantage.

Source: fca.org.uk/publication/finalised-guidance/fg22-5.pdf