Building Stronger Stakeholder Relationships Through Consumer-Centric Culture

Having explored what some of these key groups (policymakers and regulators, consumers, the media, or wider business partners) are thinking around the Duty’s implementation, we’ve identified some emerging challenges. Beyond the new compliance requirements, some businesses will be challenged by the cultural shift they will have to make, the cost of making this change effectively, and communicating changes clearly.

Keeping customer communications simple

In our annual Key Influencer Tracker survey of Personal Finance Journalists, we asked what the main challenges are in meeting the new Financial Conduct Authority (FCA) remit. A leading response was consumer understanding and engagement. Companies will need to work on effectively communicating with customers, especially as financial products are often complex in nature. This includes translating industry terminology into plain language and ensuring customers understand product value, particularly for customers with lower financial literacy levels. A further challenge identified is the need to reassess communication itself, including written correspondence and online content, to ensure they align with the transparency and simplicity required by the new regulations.

The financial services industry and more broadly, companies, are not very good at speaking plain English to customers and making sure that people generally understand the products and services they are being offered. That has always been a challenge and will continue to be a challenge after this regulation.

- Personal Finance Journalist

However, a renewed approach to communications and providing transparent information needs to be done sensitively. When speaking to Business Journalists over the summer, balancing clear communication about products, value, and customer rights whilst being mindful of ‘information overload’ was described as being crucial in meeting the Duty. When more information doesn't necessarily lead to better customer comprehension and retention, there is a tension between providing enough information and ensuring it is understandable. 

Making sure that [an organisation’s] communications are as simple as possible while giving the right information. Explaining what everything means and having that information there so if people have got questions, they can find it out without having to read terms and conditions or on an obscure corner of the website to actually find out what they mean. Having information there for people to read in a digestible form is important.

- Business Journalist

Making impactful cultural changes

But whilst both sets of journalists note that companies need to work on effectively communicating with customers, for this to happen there also needs to be a prior change in organisational culture and mindset, and journalists feel some businesses may find it challenging to adopt to a more customer-centric culture.

Changing the entire culture so that the Consumer Duty priority becomes top of mind for staff throughout the organisation, which for a lot of companies and a lot of sectors… it's part of what they do, but they don't think that way naturally.  It will be hard for them to change corporate culture so everyone is thinking first and foremost Consumer Duty.

- Business Journalist

One of the FCA’s '10 key questions for firms to consider’ asks ‘Do individuals throughout your firm – including those in control and support functions – understand their role and responsibility in delivering the Duty?’ This highlights that internal cultures will need to undergo a material, rather than simply a theoretical, transformation.

It just feels like it's the culture change required to be more open and honest with consumers …  that feels like the big challenge, none of it is difficult to do if you have that mindset of just wanting to communicate better with customers and give them the best possible options, but lots of industries don't have that as the culture within them. That's the key thing that needs to change.”

- Business Journalist

Whilst the demands of the Duty are high, however, so are the upsides if businesses effectively meet them; do it well, and the customer feedback and stakeholder perceptions should follow. There is an opportunity for businesses to build trust with stakeholders and to lead in a post-Consumer Duty regulatory environment.

Helping you solve the problem

Working to understand what stakeholder audiences expect to see from business’ in meeting the Duty from both their own perspective and the perspectives of consumers themselves and embedding this cultural change, will demonstrate clear pathways that can be followed to show proof points that these expectations are being met. Ipsos’ Corporate Reputation team works with organisations across the financial sector, as well as other industries, to identify the issues and actions that build corporate reputation, extending to areas that the Consumer Duty requirement will focus on. Supporting research in these areas will help protect and grow a reputation that a business is taking the Duty regulations seriously and is committed to embedding it within its business culture.

For more information on how Ipsos can support you in understanding your organisation's corporate reputation, please get in touch.

Table of contents

1. Introduction to Consumer Duty: A clear way forward
2. Creating and Embedding Cultural Change
3. Building Stronger Stakeholder Relationships Through Consumer-Centric Culture
4. Innovating with Financial Service Customers in Mind
5. Improving Consumer Duty Outcomes Through Customer Experience
6. Using Mystery Shopping to proactively measure staff engagement with Consumer Duty