FCA Survey Shows Banks Are Failing In Consumer Duty

The UK financial market regulator, the Financial Conduct Authority, is set to effect the new Consume Duty next week. The FCA found that 7.4 million people have unsuccessfully tried to reach out to one or more of their financial service providers in the 12 months preceding May 2022.

FCA survey shows many banks are yet to meet New Consumer Duty

The survey shows that banks have much to do before the Consumer Duty comes into effect soon. The survey involved more than 19,000 respondents. Out of the respondents who said they had used consumer support services in the 12 months to May 2022, 84% of them said they received help with their queries, with 16% saying they did not receive any help.

The survey results also showed that the customers that had at least one trait of vulnerability had a high likelihood of reporting that the customer support services did not help them meet their goals.

Out of the figures depicted in this survey, the regulator said that 7.4 million people had made an unsuccessful attempt at reaching out to one or more financial service providers in the two months. 3.6 million people were able to reach out to their banking service providers but failed to obtain the support and information they wanted.

4.3 million people in the survey admitted to receiving the information that they requested, but they noted that they could not understand the information or that the information had been sent too late to be of any significant help.

“Many of the problems experienced by consumers relate to customer services, such as poor customer service, IT system failures or service disruption, sales pressure, provider making errors or not following instructions, delays when making changes to an account or when arranging an account, or having unsuitable channels to contact the provider,” the FCA said.

The survey conducted by the FCA has also noted that there has been an increase in the number of people that are now relying on using digital banking services, payments, and a wide range of other online services. 88% of adults in the UK, equivalent to 42.9 million, are now relying on online banking services or using a mobile application compared to 77% in 2017.

Consumer Duty is almost coming into effect

The findings made by the FCA come days before the regulator implements the Consumer Duty. Consumer Duty will mandate firms to act on delivering positive outcomes for consumers using customer services that are helpful and responsive. It also requires people to make positive decisions using channels that people understand.

The regulator has said that it will crack down on the firms that fail to meet obligations, saying that the duty would be enforced in a robust manner. The regulator has also threatened to take disciplinary action on firms that fail to comply. The motivation behind Consumer Duty is to boost the way firms offer customer support services.