Consumer Duty renews focus on even better customer outcomes

Mike Todd, chief executive of Volkswagen Financial Services UK, shares his thoughts about the Financial Conduct Authority's new Consumer Duty regime which begins on July 31.

Our ambition as an industry should always be to deliver excellence for our customers. Centred on four key outcomes – products and services, price and value, consumer understanding, and consumer support - the new Consumer Duty encourages a renewed focus to ensure that every interaction every customer has gives them clarity and confidence.

Those four core outcomes exist in the DNA of Volkswagen Financial Services, and we will continue to embrace and elevate them. The Duty is an opportunity for us as a business, and for the entire industry, to build on what we have in place already to drive even better customer outcomes.

Products and services

Pillar number one is centred on products and services. Customer choice is the first layer here and is not as simple as the volume of products available alone. Choice only truly exists when:

1. More than one relevant and viable option is available and;
2. Customers are supported in their evaluation journey so they can make the decision that will genuinely drive the best outcome for them.

The appropriateness of product proposition is vital. For those in the automotive finance sector that means offering options to cater for all needs and audiences. Choices should be available for both vehicle ownership and usership, whether that’s a personal contract purchase, rental, or a subscription model.

Price and value

In an environment where e-commerce and the agency model are developing, efforts need to be focused on achieving and maintaining one hundred per cent transparency and consistency.

That mandates providing an understandable pricing structure for all. One that doesn’t discriminate based on the individual, and one that doesn’t exploit a lack of customer knowledge. Evolution in the way customers can purchase vehicles and vehicle finance bring an opportunity to ensure good value, something customers are looking for more than ever in today’s financial climate.

The more consistency and transparency, the less confusion. As a collective, that is something we should tirelessly strive for.

Consumer understanding

We have a responsibility to help our customers make informed decisions. For that to happen, there needs to be continuity of information across every channel and customer touchpoint.

The days where the physical car showroom was the only source of customer intel are long gone, and it’s no longer realistic or appropriate to make assumptions about where a customer is in their journey and what channel(s) they have come through.

In today’s digital culture, many people will be looking for information on products and services at a time and place that suits them. Many have access to multiple devices with an expectation information will be readily available at their fingertips. Equally, there will be some customers who will be unable to access information online, and those who prefer not to. All need to be catered for.

The automotive network is a multi-layered one, encompassing dealers, retailers, insurers, financers and more. What matters is that each shares the same message, using language that is understandable and accessible for everyone. When that happens, customers are empowered to confidently make a choice based on their own individual interests and circumstances.

Consumer support

The new Consumer Duty will help deliver better outcomes for customers, ensuring products are used as intended regardless of the person.  

An integral part of that is offering different routes to resources and support. That should encompass convenient, automated online portals when straightforward hygiene actions are needed – for example if a customer has moved home and wants to update their registered address.

Alongside that it’s essential to identify and support the needs of customers with vulnerabilities and offer bespoke, personal support for those who need to or prefer to communicate over the telephone and with another person directly. The best success comes when the two run in parallel.

Aligning to these four core outcomes will enable us to nurture an industry where customers are truly looked after – one where their understanding of products and services is strong, and one rooted in transparency and consistency.

Consumer Duty is a welcome addition, guiding us all to orientate ourselves to put our customers at the heart of what we do even more than we do today. By doing so we’ll enjoy increased customer confidence and loyalty, which can only be good news for business.