Meeting the challenge of Consumer Duty through Customer Self-Service
The end of this month sees the next Consumer Duty deadline come into effect, when dealers and other introducers must have finished their review of existing open products. It's a moment that is concentrating minds on exactly what the new regulations mean for retailers and, as a result, dealers and lenders are considering how best to empower consumers to decide which product is best for them.
What is Consumer Duty?
The Financial Conduct Authority (FCA) has introduced a new regulation, called the Consumer Duty, which aims to strengthen consumer protection in the financial services industry. The regulation sets out a new standard of care that firms must follow when providing products and services to their customers.
Consumer Duty consists of three overarching principles:
- Act in good faith towards customers
- Avoid foreseeable harm to customers
- Enable and support customers to pursue their financial objectives
Consumer Duty is a significant step towards improving consumer protection in the financial services industry. It is designed to ensure that firms are being held accountable for their actions and that they are working in the best interests of their customers.
The regulation will apply to a wide range of firms, including motor finance providers and introducers. Firms will need to make significant changes to their operations and systems in order to comply with the new Duty.
The FCA has also introduced new rules and guidance to support the implementation of Consumer Duty. This includes guidance on how firms can meet the new standard of care, as well as new reporting requirements to ensure that firms are meeting their obligations.
What is Customer Self-Service?
Customer self-service refers to the ability of customers to access and manage their own finance journey without the need for direct assistance from a customer service representative. This typically involves providing customers with the tools they need to assess the suitability of finance products, compare finance products and providers, personalise and adjust finance quotes and apply for finance.
This allows customers the convenience of being able to manage their accounts on their own time and at their own pace. Customer self-service is becoming increasingly popular in the motor finance industry as it allows customers to have greater control over their accounts and transactions, as well as provides a more convenient and faster service. It also reduces the workload of customer service staff, allowing them to focus on more complex tasks and can improve overall customer satisfaction by providing a more seamless and efficient experience.
How can Customer Self-Service help me meet the new Consumer Duty regulations?
The main aim of the new Consumer Duty is to ensure that customers are treated fairly and that they receive the products and services that are best suited to their needs.
The regulations require firms to take a more proactive approach to consumer protection, by putting the customer at the heart of their business and ensuring that products and services are designed to meet their needs. The goal of these new regulations is to make financing a new car as transparent as possible for consumers.
By allowing customers to self-serve, businesses can ensure that they are meeting these requirements, as customers are able to make their own choices about the products and services they want. This can also help build trust between businesses and their customers, as customers are more likely to feel that they have been treated fairly and with respect and helps to reduce the risk of mis-selling.
The benefits of self-service in motor finance are clear. Customers can browse products and service at their own pace, read the terms and conditions in detail, and make informed decisions about which options are right for them. This can be particularly important in the case of motor finance, where customers may not be familiar with the various products available, such as hire purchase agreements or personal contract purchase (PCP) deals. By allowing customers to self-serve, firms can ensure that they are fully informed about the products they are purchasing and can make choices that are in their best interests.
By embracing self-service, dealers and lenders can demonstrate their commitment to improving consumer outcomes and ensure that they are meeting their regulatory obligations.
How does Self-Service work?
The consumer self-serve solution provided within iVendi’s Connected Retailing Platform provides customers with a suite of tools that take an innovative approach to meeting FCA requirements. In essence, self-serve allows consumers to build their own purchasing journey in a manner designed to maximise compliance and work equally well online and in the showroom. In 2022, it generated £420 million in vehicle sales for almost 1,500 businesses.
It provides buyers with choice, visibility, and the relevant information needed to make informed financial decisions with confidence. With features such as suitability assessments, informative videos, and multi-lender quoting, it helps consumers to find the finance product that meets their individual needs, ultimately empowering them to take control of financial decisions on their own terms.
For retailers, Self-Serve sets a new standard, offering a comprehensive sales solution that aligns completely with the FCA. Automatically building a full audit trail, it delivers compliance while helping dealers increase profitability through streamlining operations, creating new efficiencies, following all sales leads to conclusion and powering higher vehicle sales.
Self-Serve both creates an easy and positive buying experience focussed on creating positive Consumer Duty outcomes by putting customer needs first – while also giving dealers the tools to maximise sales in this new environment.
At iVendi, we see Consumer Duty as a retail opportunity. If consumer needs are met more completely, it should automatically lead to more sales. Self-serve follows this philosophy.
Our latest whitepaper, Navigating Consumer Duty Regulations in the Automotive Sector: The Role of Technology in Achieving Compliance and Enhancing Customer Experience has been designed to help you to better understand how you can meet Consumer Duty regulations with the right technology, helping you to deliver good outcomes for consumers and enhance customer experience.
Contact us today to learn more about how our self-service solution can help you meet the FCA's Consumer Duty responsibilities with confidence.
Not Sure Where to Start?
Our new Consumer Duty Ultimate Bundle is the perfect product mix created to support dealers in meeting their requirements under the new FCA regulations, designed to satisfy the four outcome areas while aligning sales journeys with the three cross-cutting rules.
Dealers can easily upgrade their existing technology stack to the new package, which includes all the features they need - finance calculators, online and showroom finance checking, multi-lender quoting and submission, vehicle reservations, FCA and commission disclosure status, lender-specific product information, lender product videos, product suitability assessments, support services signposting for vulnerable customers, customer credit rating, stock engine, customer self-serve tools, online finance applications, iVendi’s Digital Deal, application interceptions and comprehensive management information.
Learn more about how iVendi's Connected Retailing Platform can help strengthen your compliance strategy.