The end of July 2023 marked a significant milestone for firms in the implementation of the FCA’s Consumer Duty. Now – with the first implementation deadline passed – the focus for many is around closing existing gaps, transitioning Consumer Duty into business as usual (BAU) and evidencing cultural progression in line with the regulator’s expectations.

For firms that prioritised tactical compliance and have not yet fully addressed the cultural scope required, steps will need to be taken to embed Consumer Duty throughout the organisation and to be able to evidence this aspect to the regulator.

One of the FCA’s 10 key questions for firms to ask themselves in relation to their staff, is: “Do individuals throughout your firm – including those in control and support functions – understand their role and responsibility in delivering Consumer Duty?”

The regulator has stated that the 10 key questions posed should ‘help firms to reflect on their implementation and to identify gaps or areas for improvement’. The FCA also noted that ‘firms can expect to be asked questions like these in their interactions with them’ moving forward.

The FCA have acknowledged that firms are “working towards” the full compliance requirements and have stated that, whilst their supervisory and enforcement approach will be proportionate to the harm – or risk of harm – to consumers, they also intend to be ‘pragmatic’ in their approach. However, firms – at every stage of the regulatory life cycle – should expect to be able to demonstrate evidence to the FCA on how their business models and culture is refocusing on good customer outcomes.

Emily Shepperd, Chief Operating Officer and Executive Director of Authorisations at the FCA, has stated:

“The higher standard of the Duty and the shift to focusing on customer outcomes will require a significant change in many firms’ cultures.


Firms’ boards and senior management, if they haven’t already, will have to embed a culture in which good outcomes for consumers is central. People management policies and practices, including performance management, pay and bonuses will be critical to doing so.


Firms can expect at every stage of the regulatory lifecycle to be asked to demonstrate how their business model, the actions they have taken, and their culture are focused on delivering good customer outcomes.”

To assess whether firms are building a customer-centric culture, the FCA have highlighted that they will be looking at areas including organisational values, purpose, people strategies (Training & Competence), and pay and incentive frameworks. Firms should review whether their people policies, incentives and training approaches are creating the right behaviours, embedding Consumer Duty, and supporting employees to understand their role in meeting the higher standards required.

In May 2023, 84% of 246 compliance, risk, oversight T&C and operations professionals we polled in a T&C webinar with ClearStep Consulting said they were only ‘somewhat’ confident they could evidence to the FCA that their people fully understand their Consumer Duty obligations. 

Lynne Hargreaves, T&C Subject Matter Expert (SME) and Director at ClearStep Consulting, outlined some of the areas and issues firms should consider:

“One of the key things to consider is the competent employees rule; ‘the knowledge, the skills, the expertise of staff’, and the regulator’s signposted for firms to consider those principles that sit within the TC Sourcebook.


And I think firms need to consider their strategy to people competence and how that’s approached across the firm. So: do you need to introduce T&C principles and practices across all customer-facing teams, back-office and middle-support areas?


You need to be looking at the structure and the contents of your training too – as well as the standards that are now needed – because the bar has been raised with Consumer Duty and your people need to rise to that challenge.


I’ve been working and having discussions with a lot of organisations across: ‘what does that MI pack look like across the outcomes; across the principle’, and – unfortunately – T&C and competency data is quite a small consideration in that.


For me, it’s about evidence of the effectiveness of your approach to competency across the organisation. So that’s having the right metrics at an individual and operational level that can relate upwards to a board level, so that the organisation understands the “headline risks” from a competence point-of-view.


So, with regards to staff not having the appropriate knowledge or the skills: what is the risk of that? And then, what are those measures that sit underneath that are going to give you those early warning indicators that a poor outcome may happen?


I would be looking to review your strategy and your approach to T&C across the organisation as a first off, i.e. ‘are you confident that this is the right approach for your organisation’. Then, mapping the customer journey(s) against T&C and Consumer Duty requirements will give you your knowledge and skills gaps. Then assess how are you going to “plug” them, and what data supports the demonstration of this, which will – hopefully – move people up from those early poll scores from ‘somewhat confident’ to ‘very confident’.


Your approach to T&C should always be evaluated; it should always be evolving. So, it’s not ‘once-and-done’. There are still things you can be doing to move you along the journey. Bear in mind that Consumer Duty is about raising the standard. Therefore, reviewing your approach, driving better, more competent, more knowledgeable staff, is going to help and support you to deliver that new consumer principle and evidence it – but also deliver commercial benefits as well.”


→ Approaches to T&C: a review of changes and uplifts required to T&C frameworks to meet new expectations.

→ Practical implementation: effective methodologies for assessing and evidencing staff understanding and application of Consumer Duty.

→ Mapping T&C across the customer journey: critical considerations mapped against the Cross Cutting Rules and Four Outcomes.

With the introduction of Consumer Duty, firms are also faced with a difficult economic backdrop coupled with a challenging operating landscape. The July 2023 UK Customer Satisfaction Index (UKCSI) reports that satisfaction across 13 sectors is at its lowest level eight years. With the recent commentary from the FCA on their Financial Lives Survey, firms should also expect that the regulator will continue to highlight poor performance of customer support, communications and customer understanding – especially for those in financial difficulty and/or with characteristics of vulnerability.

On the expectations around improving training to facilitate improved outcomes for customers in vulnerable circumstances, Lynne Hargreaves noted that:

“If you go back to the initial FCA vulnerability guidance (FG21/1) – published back in 2021 – this is about skills, capability, and competence of both your back-office and middle-office teams as well. So, the teams that are responsible for designing your processes and designing your products need that understanding of vulnerability and those characteristics.


How do they develop their products, their processes, their marketing, with that in mind. So, again, this is a really significant indicator of competence across the organisation and highlights the importance of people in driving and delivering what’s required in this area.”

Addressing growing concerns over customer support and call centre waiting times will also be key for firms, particularly with the FCA’s recent survey data showing that customers continue to experience significant challenges in these areas. The FCA’s findings suggest that more than 7.4 million people tried, but were unsuccessful, when trying to get in contact with their financial services provider within the last 12 months before May 2022. More than three million people who did manage to contact a firm said they could not get the information or support they wanted.

Find out more about the benefits of our approach…

Continual assessment

Clever Nelly will guarantee to deliver competent employees to the business.

Behaviour change

Create demonstrable and sustainable behavioural change.

Supports all functions

Improve customer outcomes, in both front-line and back-office functions.

Cultural improvement

Promote a positive and appropriate culture in-line with Consumer Duty, using daily reinforcement to keep key compliance front of mind throughout the business.

Recommended T&C model

Move away from a one-size-fits-all model to Training & Competency and eradicate the box-ticking culture – a clear instruction from the FCA Director of Consumer Investments.

Risk mitigation

Quickly identify systemic or individual weaknesses due to a lack of competence and proactively manage them before they manifest within the business.

Cross functional

Clever Nelly encourages Compliance, Risk & Operations to harmoniously work together utilising emotion free data driven by employee responses.

Innovative approach

Fundamentally change your approach to employee compliance to an innovative methodology which puts you ahead of the curve.


Access our Consumer Duty ‘Day Two’ operational landscape guide to discover why firms – including eight of the UK’s top ten General Insurers – deploy our technology to harvest game-changing compliance and operational benefits.

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Embedding the Consumer Duty to empower the frontline

Ian Scaife, Group Head of Compliance at Clifton Asset Management, discusses how Clever Nelly has “completely changed” their approach to employee Training & Competence, enabling them to respond quickly to FCA regulatory requirements, strengthen frontline capability and embed Consumer Duty.

Discover how Clifton Asset Management have:

  • Increased frontline competency of vulnerable client management by 36% in just three months.
  • Increased frontline competency in six critical regulatory training categories by 31%.
  • Generated an average compliance score of 91.8% across five teams in July 2023.
  • Generated a 96% employee engagement rating – with zero non-engaged employees since deployment.


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