Consumer Duty: common sense for contact centres
When we talk to operations, customer service and contact centre leaders, the general feeling is that the principle of Consumer Duty feels like an extension of common sense.
There is often an overall sentiment of: “Putting the customer front and centre within our contact centre operations is happening on a daily basis – it’s just that Consumer Duty “formalises this” and requires robust evidence of it happening.”
By now, organisations should have scoped the changes that are required within their front-line operations (and have made uplifts where necessary) in order to demonstrate compliance against Consumer Duty. In this article from Elephants Don’t Forget, we assess how some firms are approaching their people strategy within the contact centre environment and evaluate potential pitfalls.
Lessons learned from the frontline…
We can agree that front-line staff generally have a desire to do the right thing by customers – it’s a central requirement of the job function. Yet, Consumer Duty asks more of them – and this is a new challenge.
When we speak candidly with firms about their “people” challenges with regards to Consumer Duty, we often get the impression that the “people-aspect” seems to have been deprioritised in some cases, primarily due to the fact that firms have had pressing priorities they needed to complete. Now – as we near Consumer Duty implementation (31 July 2023) – we see that firms are increasingly becoming concerned about their people, their competence and capability.
Firms recognise that they will need ‘buy in’ from front-line staff to bring to life, and they also recognise they may well need new sources of granular and actionable people Management Information (MI) that evidences an appropriate incorporation of Consumer Duty in their people and training approach.
In our May 2023 Consumer Duty webinar, we asked two blunt questions to a cross-section of compliance, risk, oversight, T&C, and operations professionals with regards to the competence of their people and their ability to evidence this requirement to the Financial Conduct Authority (FCA).
67% said that they were only ‘somewhat’, ‘slightly’, or ‘not confident at all’ that their people have the required competence to deliver against Consumer Duty. 84% of them said they were only ‘somewhat’, ‘slightly’, or ‘not confident at all’ that they could evidence to the FCA that their people fully understand their Consumer Duty obligations.
Consumer Duty: in a contact centre environment
In the context of the contact centre environment, we also have to consider existing challenges – agnostic to Consumer Duty – that need to be recognised in the scope of this regulatory change. We know the industry suffers from higher-than-average employee attrition levels and problems with maintaining a depth of experienced and competent agents to cope with increasing customer contact demands. This often results in increased levels of agent stress, anxiety and further absenteeism, which – in the context of Consumer Duty – doesn’t aid customer support, for example.
Customer service leaders generally agree that their agents have one of the most difficult jobs to do within their organisation; not only do they have a myriad of information to learn and retain to do their jobs, they also often have to put up with a lack of investment in infrastructure and systems to do it with – not great conditions for happy and capable agents.
So now, with Consumer Duty being added to the “learning” mix, expectations around the role and critical importance of the front-line will change too – and firms have really got to shore up their agent support and training programs to make sure that staff capability and competence is continually evident in their approaches.
Process > outcomes
We’ve also got to remember that this is the biggest change in customer-centric regulation since Treating Customers Fairly (TCF) was introduced. TCF focused on processes, Consumer Duty focuses on outcomes. It’s now about showing traceable and continuous workings to the regulator with regards to how a firm is measuring and facilitating good customer outcomes.
It’s also enforceable, which is why there is probably a bigger sense of anxiety around it, and why the element of mitigating foreseeable harm, for example, might well be keeping some operational leaders awake at night.
This is why it’s important for firms to focus on understanding what they have to do differently in relation to their individual people in order to ensure they comply. A lot of that is looking at processes and training, and thinking about the things that will – in particular – impact their front-line staff; the individuals that are interacting with customers and prospects on a daily basis and are – in reality – owning most of the risk.
Where is the uplift required?
In reality, nothing really dramatically changes in terms of the “job description” of your agents. The uplift that is required is that firms need to overtly link Consumer Duty to their people and culture. In short: firms require robust evidence of how the firm is embedding staff understanding of facilitating good customer outcomes within the scope of the new consumer principle, the cross-cutting rules, and the four outcomes.
This is fundamentally reliant on agents having a sound understanding of all policies, processes and products: the “hard, quantitative, metrics” – if you like. But it’s also critical that firms understand the qualitative metrics too. And it’s within this qualitative and quantitative training assessment scope that we can understand the FCA’s continual referencing of organisational culture and the central role it plays in underpinning Consumer Duty deliverability and compliance.
The regulator wants it to be a daily conversation within the firm, not just a ‘once-and-done’ e-learning exercise, because the FCA recognise that consumer demands and financial conditions are subject to continual and sudden changes, hence the focus on vulnerable customers and, more recently, the cost-of-living crisis. Therefore, processes around training, for example, need to follow suit to ensure it is continual and kept front of mind for employees. In this respect, Consumer Duty doesn’t end on the 31 July 2023 – it’s a continual journey of compliance that has only just begun.
Bringing Consumer Duty to life within the front-line
When we speak to operational leaders around what they are doing within their contact centre to bring Consumer Duty to life, we often hear of proactive but – essentially – imperfect approaches, in some respects.
Firms tell us that they’ve made a huge number of process uplifts, that they’ve carried out assessments on inhouse and outsourced operations, they’ve introduced more mandatory training sessions in key areas, e.g., vulnerability, and they are looking at implementing some sort of cultural monitoring plan. Some contact centres are even using physical references on the floor of the centre to keep agents aware of the scope of changes.
In most instances, firms are setting tolerance ranges and leveraging existing data and indicators for their Consumer Duty MI. So, for example, for both training and cultural measures – firms may be using indicators including:
– Mandatory training completion rates.
– Employee engagement targets.
– Attrition rates: as an indicator of problematic cultural issues.
– Employee feedback surveys.
Circling back to the earlier point regarding quantitative and qualitative assessment and data, we can say that these indicators are essentially ‘hard and binary’ data points in most instances. In the instance of training completion, for example: it’s either a ‘yes’ or ‘no’ (or, in some cases: ‘I’m having to chase them down to complete it’).
These indicators tell the firm – and the regulator – that some form of training has taken place, how many people have completed it, and where satisfaction/dissatisfaction in training approach/delivery may exist. Valuable as lagging indicators but, arguably, not hugely useful as leading indicators of real-time people-based risk.
Most mandatory training sessions – if e-learning based – generally require every employee to sit through the same module course – often disregarding tenure or existing mastery of the subject knowledge being assessed – and compete a test questionnaire at the end of it. Following completion, a certificate provides the employee – and the firm – with a pass mark (usually 100%). Competence can therefore be rubber-stamped as being maintained and optimal for the job.
In reality, the problem with single-point-in-time assessment isn’t just related to the fact that people struggle to retain the required learning. “One-size-fits-all” training is fundamentally disenfranchising for staff, as it assumes that everybody requires the same learning content, at the same moment in time. To compound matters, adding yet more mandatory training just further encourages compliance fatigue for front-line staff, which doesn’t help to embed regulatory learning.
Training is not ‘one-size-fits-all’…
It is also worth remembering that – over the last three years – FCA Final Notice action has regularly identified deficiencies in firms’ training programmes, highlighting a reliance on “one-size-fits-all” approaches, a culture in which employees did not complete mandatory training, infrequency of training, and the provision of limited and generic training which was not sufficiently targeted at employees’ roles to enable them to understand their responsibilities.
What’s more, a new generation of employees are literally crying out for learning and development opportunities in the sector. Even the FCA is pushing the learning agenda. In a recent speech made by Emily Shepperd, Chief Operating Officer and Executive Director of Authorisations at the FCA, she stated that:
“[W]e know it can be tricky to attract the top talent at present. A recent study by Workplace Intelligence found that 74% of millennial and Gen Z employees would quit a job in a year if there were no opportunities for upskilling and development. But the best way to do that is to offer not just incentives, but a clear purpose.”
What is the clear purpose then?
From the FCA’s perspective, the clear purpose of Consumer Duty is for firms to further embed customer-centricity to facilitate great outcomes and experiences for customers within their culture. To make this an ongoing reality within the contact centre, it’s about tightening up your existing governance and oversight and really “digging into” the operational processes with regards to your people.
Every firm is likely to be more forensic in their approach to analysing complaints and dissatisfaction drivers in order to show proactivity in mitigating foreseeable harm, for example. Yet this level of proactivity in predicting what could go wrong also needs to be applied to front-line agent competence.
Agents want to do the right thing, yet how many of your agents, for example, openly say that they are concerned about dealing with a vulnerable customer because they don’t feel they’ve got the appropriate skills, knowledge and capabilities to handle the interaction? If you’re in the dark on this, your firm – and customers – are open to risk and harm, respectively.
Frontline agents are handling (potentially) thousands of customer interactions every day – and here is where the majority of risk resides. The question that firms need to critically evaluate is: how do you know that your individual agents are able to apply their training when interacting with a customer in the context of Consumer Duty? For example:
– Do they understand how to apply friction to the sales process?
– Do they understand unreasonable barriers to pursuing financial objectives – what does this look like in nuanced cases?
– Do they understand the (potentially) 100s of process and policy changes you have made? If not, how many errors are being made/going to be made as a result of this, and what foreseeable risks could these errors pose to your customers?
Town hall meetings, 1-2-1 coaching and regular communications throughout the firm sows the seed of change; but you need to be regularly assessing agent competence in these areas to know what risks are on the horizon.
Traditionally, contact centres rely on their Quality Assurance function for insight into these problematic areas. Yet, in terms of evaluation coverage, it’s a reality that a tremendous amount of conversations won’t be in scope. To compound matters, a lot of QA evaluation will be lagging indicators. Meaning that, in the instances of where something has gone wrong, consumer detriment has likely already occurred.
An essential component of Consumer Duty requires firms to have greater foresight into the potential risks their customers face. Without technology, it’s difficult to see how a more robust approach can be applied. There are so many valuables data points within the contact centre that firms can utilise to improve customer outcomes and agent performance: calls, chat transcripts, complaint volume and drivers, customer feedback etc. However, these QA findings will also require a scalable way to create a feedback loop for firms to train their front-line agents appropriately and embed any required process or behavioural changes.
Finally, as we look towards operating in post-Consumer Duty implementation environment, here are some points of good practice we have taken away from conversations with your industry peers:
– If you can, have a regular huddle that brings all areas of the business together. Sit and listen to calls; listen to customers. Make all business areas aware of the great feedback you are receiving and where areas of improvement are required. ‘Buy in’ and individual accountability are key.
– Contact centres leaders have a critical role in creating a Consumer Duty culture. Link everything to good customer outcomes. Ensure your agents understand what this means in the context of their role, conduct, behaviour and day-to-day interactions.
– If you have an agent of the month initiative, champion demonstrable examples of great customer outcomes. Celebrate it in your culture to bring it to life. Our customers use our technology to champion exceptional agent competence against required regulatory learning – a great data point which we’re sure would please the regulator!
– Use insight to drive performance and minimise your risk of facilitating customer harm within the front-line. Be smart and proactive with your QA data. Collecting the data is all well and good but if there is no scalable feedback loop to get the learnings back to your agents and continually embed them within your processes, you’re not going to see effective change or error reduction.
Learn more about how Elephants Don’t Forget can support your operation
If you would like to understand more about the outcomes of our approach within contact centres, we have a number of use cases from large firms to SMEs.
Recently, in association with Moneybarn Vehicle Finance, we won Best Technology Provider at the 2023 Car Finance Awards, receiving judges’ acclaim for our approach to continuous employee learning. With a focus on aligning individual employee understanding, retention and in-role application of critical regulatory themes within their front-line operations, Moneybarn have seen tangible improvements in key operational metrics and customer outcomes – all correlated from improved staff competence and capability.
If you would like to learn more about the collaboration process on this project, the case study document from Elephants Don’t Forget is available by Clicking Here
Elephants Don’t Forget are world leaders in the use of Artificial Intelligence (AI) to optimise employee competency to improve performance and mitigate risk.
They financially guarantee that workplace training is learned and retained by employees and support customer service leaders in some of the world’s leading brands including Microsoft, Aviva, Vodafone, RAC, AIG, Capita, and AIG to improve people performance and drive operational efficiencies.
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