How behavioral analytics honor FCA Consumer Duty rules & improve CX.

Consumer Duty (aka the Duty), the new regulatory framework by the UK’s Financial Conduct Authority (FCA), is intended to drive significant cultural and behavioral change amongst financial services companies in an effort to protect consumers. Under Duty, firms must ensure that all the products, services, and experiences they deliver under regulatory requirements are in their customers’ best interests.

That’s good news for financial institutions and their customers, as this shift will result in a higher level of trust for customers of financial institutions.

However, getting there will require enhancement of products and services and the ability to monitor, retain, and address challenges within each customer experience. The biggest impact will be felt in the digital space, where more and more financial transactions are being conducted.

Here are a few ways financial organizations can focus on optimizing their digital experiences to reach compliance with the Duty better.

Duty compliance starts with visibility into the customer experience.

It can be difficult to know what kinds of online financial services customer experiences need to comply with Financial Conduct Authority requirements. Digital teams ask themselves daily, what paths are customers taking to complete a task? Are they getting stuck along that journey? If so, what caused them to get stuck? How do I, as their provider, remove the friction/frustration that they’re encountering?

Part of the Financial Conduct Authority Duty’s standard is that digital customer journeys should not be unclear or confusing (rule 9.7), making it imperative that organizations be able to monitor and review these experiences. Journey analytics gives companies insights into what customers are doing online and where customers are dropping out of those experiences. These insights help digital teams to make evidence-based decisions on customer experience design.

When customer journeys are monitored and reviewed using journey analytics, companies can quickly identify usability issues that need to be addressed in order to improve customer experience (CX) and provide consumer protection. By improving customer journeys, digital teams are also able to increase customer loyalty and customer lifetime value.

Collecting voice of the customer feedback is another way to remain aware of and responsive to client concerns. However, VoC alone limits digital teams’ understanding of the issue, as they can’t measure its size and scale. For a more comprehensive understanding, one-click quantification is a great way to augment VoC so that responses can be more easily prioritized.

Finally, firms should consider ensuring that they have real-time behavioral KPI alerting and error/friction monitoring so they can react to customer issues quickly. One way they can do that is through real-time rescue. In other words, depending on what is driving the frustration, firms can choose to send personalized offers, email updates on enhancements, a prompt to join a chat, or send a survey to understand the issue better.

It’s critical to build a cross-channel understanding of customer behavior.

Financial services customers are increasingly using multiple channels to interact with their providers. They will often start a process online and then call the contact center to complete it, particularly if they face friction. According to retail banking surveys we conducted in the UK and US, 52% of UK respondents prefer to leverage multiple channels when interacting with their banks while 63% of US respondents said the same. When ensuring that customer journeys are not confusing or unclear, it will be important to solve for this use case.

This is where behavioral analytics come in. By analyzing customer interactions across channels, behavioral analytics can help you identify customer profile types and predict customer behavior. This provides the ability to improve customer experience (CX) by creating more seamless customer journeys. It also helps to reduce customer churn and increase customer lifetime value.

As firms look to partner with companies that can help them support cross-channel experiences, they should consider working with someone who can bridge the gap between the channels. Contact center associates will need visibility into the digital experience from the person with which they are speaking. This will allow them to serve the customer quickly without asking them to describe or recreate their experience. It will also make the resolution of escalations much easier because a session replay and diagnostic information can be attached to the ticket. When Western Union implemented this strategy, they saw a 30% increase in first call resolution rates, which drives better customer experiences and improved contact center efficiency.

Session replay can help provide evidence of compliance.

The Duty requires that firms will also need to assess and evidence the extent to which and how they are acting to deliver good outcomes. This means proving that the appropriate information was collected from and provided to customers to assist them in making informed decisions.

To do this properly, firms will need to be able to capture 100% of user sessions and have the ability to replay them as needed. To that end, the long-term storage of session replays will also be critical. Ideally, being able to link session replays directly to contact center calls will provide an in-depth account of actions the firm has taken, not just from recordings of calls, but from associated digital sessions alongside them.

This data-driven approach to customer engagement will provide a wealth of customer insights that can help improve customer experience (CX) and, at the same time, ensure that one-click FCA compliance is built in from the outset. With these customer insights, financial services firms will be able to see how customers interact with their digital channels and, more importantly, ensure they are protecting consumers.

New Consumer Duty compliance drives better relationships.

The Duty is challenging the financial sector to become truly customer centric. In addition to evaluating and enhancing customer journeys and processes, firms must provide evidence of better customer experiences and the types of consumer protection they provide. As companies endeavor to become compliant, they will have to make sure that they are implementing capabilities that will record and store digital experiences with the ability to play them back, identify, quantify and diagnose points of friction in the digital experience, deliver real-time support when customers experience friction and create bridges between digital and phone channels.

By doing this, financial services companies will not only be compliant with the Duty but will also be better prepared to serve and retain customers in a world that is becoming increasingly digital.