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UK’s Consumer Duty Goes Live As FIs Reaffirm Integrity Of User Needs

The UK Financial Conduct Authority’s latest effort to ensure financial services providers are offering consumers the appropriate tools and services has just gone life. For leading banks and institutions looking to grow, user interest and user experience (UX) is already well-baked into digital roadmaps.

Consumer Duty represents what the FCA calls a “paradigm shift” in its expectations of firms, but while miss-selling products and frictions placed in journeys that run contrary to bottom lines undoubtedly still exist, the competitive nature of digital banking has led the lion’s share of providers to a position in which the customer is at the center of design and engagement.

At the heart of new rules – announced last year and launched this month – financial services providers face a series of guidelines that require them to better monitor data to produce evidence-based outcomes at all stages of the customer journey and product lifecycle. Arguably in the past banks and other lenders designed experiences geared primarily toward sales and business needs, but the digital age and the ease with which clients can switch providers has meant customer-centricity is at the core of app and desktop design.

Within digital teams, the development of capabilities such as personal financial management (PFM) tools and budgeting insights may seem like cost centers that merely serve as value-adds, but in most cases banks have started to extract value from the customer data such functions generate. 

The pace of innovation is fairly steady within digital banking, although recent cost pressures have forced providers to focus on core offerings. As backend changes continue to be implemented to comply with Consumer Duty it’s worth assessing how different markets have positioned recently to support user centricity. 

Checking Account Providers Continue Apace 

29% of current account providers tracked by the Digital Banking Analyzer altered their product discovery journeys in the middle quarters of this year, offering revisions to their interfaces and access processes. Accessible product discovery menus heavily entrenched in self-service encourage customers to diversify their portfolios.

Providers have also made it easier for new customers to apply for checking accounts through their desktop servicing platforms. As many as 75% of UK-based account providers offer the ability to apply for a checking account for new customers through their desktop servicing platforms in order to streamline the process and keep applicants in channel. 

Generally, account providers are hoping to increase deposits by making it easier for customers to navigate interfaces and educate themselves on the products and services available to them. Providers that fail to do so might not only lose out on business but could face regulatory scrutiny. 

Credit Card Providers Lean Into UI

Credit card providers have looked to offer greater visibility into users’ financial standing recently, optimizing core journeys such as in-app statement views. Changes such as this help lenders adhere to regulations while keeping their platforms accessible and easy to use. About half of credit card providers have made changes to the way credit card statements are presented since the third quarter of last year.

Mortgage Lenders Maintain Marketing

Despite the slowdown in the mortgage market, about half of providers tracked by the Digital Banking Analyzer revised their mobile application processes in the final quarter of 2022. As many as 56% of these lenders changed their account overview menus, adding or simplifying the journey through the app with quick links and common services. The same number of providers also added the ability for users to turn off email marketing in-app to adjust to user marketing preferences.

Investment Lenders Focus On Core Upgrades

Given that retail trading activity has been muted in recent months perhaps it is less surprising that providers are focusing on core upgrades. About a quarter of firms tracked have adjusting their main menu navigational tools and placement on their desktop serving channels in the past year with many providers moving their navigation menus to the top of the main page or editing their quick link offerings.

Across financial services providers have been leaning into personalized and customizable experiences, led by the market. This trend should help most lenders in their aim to comply with Consumer Duty – which in turn requires providers to learn from their data and adjust their offering accordingly.

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