THE FULL MEASURE
EVIDENCING GOOD CUSTOMER OUTCOMES

GAIN Credit

In its latest drive to support customers in vulnerable circumstances, the Financial Conduct Authority (FCA) wants firms to be able to evidence that vulnerable consumers experience outcomes as good as those for other consumers. The FCA launched their six Treating Customers Fairly (TCF) outcomes back in 2006 and with the new Consumer Duty outcomes on the horizon, the goal for the FCA has never changed. Yet so many businesses fall into the trap of not fully measuring the positive outcomes we all strive to achieve.

In the quest to attain and measure good customer outcomes in the consumer lending space, has sufficient time really been spent understanding what ‘good’ looks like for our businesses? Does the Management Information (MI) you are using to measure outcomes give an accurate indicator of whether you are achieving good customer outcomes or have you made the mistake of only measuring business outcomes, performance, or policy/process adherence? These metrics are important but are they enough to ensure vulnerable customers experience outcomes as good as other consumers?

Firms need to take a step back and really challenge themselves and agree on a clear view of what any existing or potential customer should be able to expect and what a good outcome would look like for a particular customer journey. This can be for existing journeys and should form a core part of your development process for any new customer initiatives.

Different business areas will have different desired outcomes. A good customer outcome at the acquisition stage will be different from a good customer outcome in collections and this is because different actions are being undertaken with different desired outcomes.

Think of your desired outcomes as a set of mission statements for each business area. For example, what is your desired outcome for forbearance plans? How about a new applicant of a loan? Is it appropriate to their circumstances? Ask yourself if it is understood and affordable. Think about the FCA’s outcomes, which are relatable to the action you are undertaking.

This may seem quite basic but it will keep you true to what you are trying to measure or test. It will also stop you from solely measuring your policy and process adherence and really focusing on whether you are delivering good customer outcomes.

Once you have agreed on your desired outcomes, you can then start looking at what is needed to provide oversight. MI is not just about numbers. Data will need to be quantitative and qualitative and some outcome MI will already exist. You will find that there isn’t a need to reinvent the wheel here. The relevant information may already be available in different guises. Your MI will give you oversight and focus on areas that may require further analysis or deeper reviews such as outcome testing.

Outcome testing aims to assess all interactions with the customer, communications, documentation, and records. Outcome testing can range from full end to end journey testing to a ‘point in time’ testing approach and will identify potential issues that your standard quality assurance checks may not pick up. There are so many ways to perform outcome testing and it’s important to design a framework that’s right for your business and, more importantly, your customer base.

Approaching customer outcomes in this way will really help you understand what ‘good’ looks like and quickly get to the root cause of any issues. You can then address and make any necessary changes to processes, policies, and procedures that are causing poor outcomes before complaints spike or trends become costly and damage your reputation. Focussing on your outcomes brings an opportunity to improve your service and reduce costs.

Looking to the horizon and the impending Consumer Duty paper, the FCA is introducing four new outcomes that represent key elements of the firm-customer relationship: communication, products and services, customer service, price and value.

The Consumer Duty aims to provide clear expectations for firms regarding customer outcomes. It also requires them to ask what consumers should be able to expect, focus on the actual experience, take action and assess the effectiveness of actions.

Although there will be a further round of consultations before changes to the rules are enacted, the paper indicates very clear expectations on firms. With the key to delivering good outcomes being a starting point of knowing what your existing or potential customers should be able to expect, the question remains. Do you really have a good understanding of what a good customer outcome looks like in your business?