The FCA has commissioned a survey of 17 retail banks and building societies to review how firms ensure their customers understand the products they have bought. This is in response to one of the Parliamentary Commission on Banking Standards (PCBS) recommendations that firms demonstrate that they are fulfilling a duty of care to their customers, embedded in their approach to designing products, providing understandable information to consumers and dealing with complaints.
The survey has revealed that firms generally demonstrate good practice. Some examples observed in the survey include:
- The use of customer survey findings by all firms, with many using consumer group discussions as the basis for producing better future products.
- All the responses included examples of firms finding an innovative solution, a simple solution, or actually changing (simplifying) the product itself, in order to avoid customer confusion.
- A more personal approach made by some firms, such as 1-to-1 calls with any complainants, leading to better consumer outcomes.
- The use of education videos available online and in branch to actively demonstrate key features and limitations.
The FCA has reported, however, that some firms may not be effectively distinguishing between customer understanding and customer satisfaction. Firms must continue to check their customer’s understanding on a regular basis whilst also ensuring customers are considered during the end to end life cycle of a product. The FCA will continue to monitor this area and undertake further follow up work in due course.