Plain Numbers join the debate on a New Consumer Duty at BSA Conference

We were delighted to join this years Building Societies Association Annual Conference in Liverpool on May 5th for a panel discussion on a New Consumer Duty.

Ben Perkins our Head of Operations joined the panel to give insights to members on how they can meet their obligations around communications and consumer comprehension.

This follows the latest consultation in December in which the work of Plain Numbers is mentioned twice.  

Plain Numbers we welcomed a New Consumer Duty, however, we understand there are some challenges for firms around how they need to respond in order to comply with it.

In the discussion Ben said: “It would be easy for firms to believe that if they are complying with the current FCA principle 7 to be ‘clear, fair and not misleading’ then they do not have much work to do on their communications to meet the needs of the Consumer Duty – this would be a mistaken view as the Duty builds significantly on from Principle 7.”

The FCA’s latest consultation paper says – ““The proposals build on, and go further than, Principle 7 by requiring firms to focus much more on consumer outcomes and understanding throughout the customer journey. As well as ensuring individual communications are fair, clear and not misleading, firms will need to consider their overall approach to communicating information to make sure they equip consumers to make effective, timely, and properly informed decisions. They will need to monitor and, where appropriate, test and adapt their communications so they can demonstrate they have acted to deliver this outcome and support consumers.”

The key difference is being able to demonstrate the activity firms are taking around an overall approach to ensuring good consumer comprehension. The good news for firms is that Plain Numbers can help.

Our trials showed that across different industries, including FCA regulated firms, consumer comprehension is much lower than most organisations expect. In fact, in all our trials around a third or less of consumers were able to demonstrate that they understood the communication despite participating organisations being seen as industry leaders.

Our research has also revealed an uncomfortable truth for regulated industries – that people’s perceptions of their understanding do not match their actual understanding – in other words, people often think they understand but they don’t.

But most importantly, it also proved that it is possible to significantly improve customer comprehension. On average across the trials comprehension doubled.

By implementing a Plain Numbers Approach, firms can not only improve comprehension, but also demonstrate to regulators their commitment to improving their communications for better consumer outcomes.

Ben concluded by saying: “A new consumer duty is not just a headache and a process, while you have to follow that process, it's an opportunity for firms to be the best communicators and do the best for customers."