Consumer Duty: From ‘Duty’ to ‘Centricity’ -
As it moves from a compliance-led programme into the business, firms can use Consumer Duty foundations to unlock sustainable, customer-led growth.
Introduction
As an insurance industry, we are now very familiar with Consumer Duty and firms have, to date, exerted considerable effort to achieve substantive compliance. Following the sprint to the deadline, firms are now asking, ‘what’s next?’. Further to our previous article (see below), we now consider how its implications go beyond a regulatory duty and in fact, offer a unique, industry-wide opportunity to reposition customer experience as the central pillar underpinning a firm’s strategy and operations.
Forward-thinking firms are using the foundations put in place for Consumer Duty as the basis of sustainable customer-led growth.
Regulatory changes are not new within our industry, with specific regulations often targeted at certain segments of the business , for example, GI Fair Pricing. With Consumer Duty, however, the focus has shifted to a holistic approach. Firms are increasingly taking advantage of customer experience methods such as journey mapping, voice of customer and closed loop MI & reporting, which can be used to demonstrate good customer outcomes across the whole organisation.
Now that insurers have the foundations of Consumer Duty in place, it is the perfect time to embrace customer centricity and codify the customer activities which are proven to deliver improved outcomes and increased satisfaction, alongside commercial growth. This level of detailed customer journey design can also enable firms to prioritise and sequence their change portfolio by aligning both customer and commercial objectives.
Consumer Duty to Customer Centricity
The FCA is clear in its assertion that implementation of Consumer Duty ‘will require a significant shift in both culture and behaviour’, signalling that this is far from a tick-box, one and done exercise. Consumer Duty is not going away and provides a unique opportunity to not only review existing processes and journeys but improve customer engagement, trust and operational efficiency.
Customer centricity is a simple concept, putting customers at the heart of everything an organisation does. This includes designing experiences, services, and products from an insight-led customer viewpoint, not what an organisation thinks they want. This philosophy is critical for insurers to stay relevant within today’s market with constantly evolving customer needs and the increasing shift towards digital, we have far surpassed the days where customer experience was the responsibility of just one customer or operations team. To achieve true customer centricity, the customer needs to be embedded within the DNA of a business.
The benefits of moving towards being customer-led are now widely recognised; customers will remain loyal to companies that adjust the experience to their circumstances. A focus on customer experience is proven to drive revenues. KPMG research over several years shows that the top 10 companies ranked for customer experience excellence achieved 10x the revenue growth versus those firms who do not prioritise investment in customer experience. This is evidenced by a leading UK insurer, who saw their NPS improve by 12 points, customer retention improve by 10 ppts and an annualised operational cost saving of £3million. It’s becoming clear customer centricity is no longer a requirement but an imperative.
Firms shouldn't walk past the opportunity to use Consumer Duty foundations to drive sustained customer led growth.
How can we help?
KPMG are recognised as leaders in both customer experience excellence and risk/regulatory consulting. This combination means we are ideally placed to support firms as they move from Consumer Duty programmes to embedding customer centricity.
Key areas we are helping firms:
- Customer segmentation and strategy – Clear and agreed target segments and personas informs strategy and proposition design
- Customer journey mapping - Our proven and rapid ‘factory’ approach means we can quickly and effectively finish the longtail of journeys yet to be mapped, and our proprietary ‘Discovery’ mapping tool increases business usage of the journeys
- Voice of the Customer - KPMG are leaders in VoC programmes turning customer data into actionable insight)
- Comms / outcome testing – Our multi-approach process includes AI-driven contract testing through to ‘real life’ customer outcome and comprehension testing)
- Fair Value Assessments - Using our regulatory expertise and industry knowledge to support General Insurers' fair value assessments of products and services
Who to contact?
Look out for the ‘From Duty to centricity’ webinars coming soon for a deeper dive, or please contact the leads below:
