Key takeaways
- The FCA Consumer Duty, in effect since July 2023, impacts over 60,000 financial firms in the UK and makes customer centricity a legal requirement rather than a strategic aspiration.
- The Duty sets four outcomes firms must achieve: consumer understanding, price and value, products and services, and consumer support.
- Research Ops, Market Research, UX, and CX teams are central to compliance. Firms need a contextual understanding of every customer persona for every product and service they offer.
- Different research methods support different outcomes — discovery research and segmentation for consumer understanding, path-to-purchase for price and value, user research and journey mapping for products and services, CX research for consumer support.
- With Indeemo, financial firms can capture rich, contextual multimedia insight from customers — including vulnerable customers — with enterprise-grade security covering SOC 2 Type II, ISO 27001, and FSQS.
Why Consumer Duty matters for financial services research
The FCA Consumer Duty impacts the practices and policies of over 60,000 financial firms in the UK. Every financial services institution we speak to has raised questions about how best to conduct the research required to comply with this legislation.
Through working with some of the UK's largest financial institutions, we know first-hand that implementing the processes, tools, and resources needed to become a truly customer-centric organisation is hard. Customer centricity has always been a strategic goal, but one without a hard deadline. That changed with Consumer Duty.
UK financial institutions should look at the FCA Consumer Duty not just as legislation they must comply with, but as an opportunity to accelerate and achieve company-wide customer centricity. This article introduces some key areas of the legislation with a focus on customer centricity. For a detailed explanation of the legislation itself, the FCA's own guidance is the definitive source.
This article also lists the research methods and tools that help Research Ops, Market Research, UX, and CX teams build a contextual and empathic understanding of their customers — and the capabilities of the Indeemo platform most relevant to Consumer Duty compliance.
"It's possible that the FCA Consumer Duty is the first piece of legislation that makes customer centricity a legal requirement." — Eugene Murphy, Founder and CEO, Indeemo
What is the FCA Consumer Duty?
The FCA Consumer Duty — described as the largest regulatory overhaul in financial services in a decade — is a set of rules designed by the UK's Financial Conduct Authority that incorporates a central consumer principle: a business must act to deliver good outcomes for the retail consumers of its products.
From a researcher's perspective, it's worth noting that the definition of "retail customers" covers both consumers and B2B customers, and includes:
- For consumer credit, it relates to all credit-related activities
- For deposit-taking activities, it applies to consumers and micro-enterprises
- For investments, it applies to non-professional clients
- It applies to all regulated mortgage products
- For payments, it applies to consumers and micro-enterprises
- In certain instances, it applies to SMEs
The Consumer Duty regulations cut across all areas of a financial services business, including marketing and communications, customer service, and the design and development of new products and services.
Who does the FCA Consumer Duty apply to?
The FCA's rules impact over 60,000 financial firms in the UK, though other industries are watching closely — this is arguably one of the first regulations in the world to legally require organisations to become genuinely customer centric.
Consumer Duty focuses on an overall duty of care to retail customers who purchase a financial institution's products or services. The final regulations effectively replace two earlier principles:
- Principle 6: A firm must pay due regard to the interests of its customers and treat them fairly.
- Principle 7: A firm must pay due regard to the information needs of its clients and communicate information in a way that is clear, fair, and not misleading.
With more complex and detailed regulatory processes embedded in Consumer Duty, it directly impacts UK financial services — banks, insurance companies, money lenders, and others. The outcomes benefit consumers, including businesses, individual consumers, and critically, customers deemed vulnerable.
How does the Consumer Duty affect vulnerable customers?
Vulnerable customers are defined as those "who, due to their personal circumstances, are especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care." (Sarah Ronald, 2022).
In its finalised guidance, the FCA explicitly notes the importance of Consumer Duty's outcomes for vulnerable customers: the regulator expects customers with characteristics of vulnerability to benefit from overall improvements in outcomes delivered by the Duty. (FCA Finalised Consumer Duty Guidance).
Research involving vulnerable customers needs to be handled with particular care. This creates specific requirements around data security, participant privacy, and the ethics of recruitment and moderation — all of which shape how research tools should be selected and deployed.
What role do research teams play in Consumer Duty compliance?
With the onus on financial firms to prove they put the customer first, there needs to be increased alignment across all teams to meet Consumer Duty compliance.
Research Ops and Design Ops teams play a central role in helping organisations centralise and streamline research across departments. With a specific focus on Consumer Duty, Market Research, Insights, UX, and CX teams are critical when it comes to helping financial institutions understand the behaviours and experiences of customers.
These teams need to develop a more contextual understanding of the customer journey for every product and service, for every customer persona they serve.
Why is Consumer Duty important?
Consumer Duty should also be viewed as the first customer-centric legislation of its kind. It means that the voice of the customer, their vulnerabilities to meeting financial objectives, and their right to appropriate duty of care must be heard, understood, and aligned across the organisation.
To meet Consumer Duty, financial firms need to implement initiatives, processes, policies, and product and service improvements that result in four outcomes.
What are the four outcomes of Consumer Duty?
The four outcomes firms must achieve are:
- Consumer understanding. Consumers are equipped to make good decisions. Information is available at the right time and is understandable.
- Price and value. Products and services are sold at a price that reflects their value. There should be no excessively high fees.
- Products and services. Products and services are fit for purpose. Terms match target consumer needs and products and services work as expected.
- Consumer support. Customer service is responsive and helpful. It should be as easy to complain, switch, or cancel products and services as it was to buy them.
Many of our clients ask the same question: to meet these requirements, what are the best ways to research their customers? Essentially, how can firms get closer to their customers in a way that lets them implement the changes Consumer Duty requires?
What research methods support Consumer Duty compliance?
Here's a set of research methods and tools that MR, UX, and CX teams can use for each of the four outcomes. If you're familiar with these methods and want to know more about how Indeemo's tools help, skip to the next section.
Consumer understanding compliance
To define and understand all your customer segments and personas, and provide the right information across all channels for every customer segment when they need it:
- Customer surveys and segmentation
- Digital Ethnography
- Discovery/Generative Research
- Pre-tasking Focus Groups / IDIs
Price and value compliance
To ensure the price a customer pays for a product or service is reasonable compared to the overall benefits they experience:
- Surveys
- Competitor analysis
- Path-to-purchase research
Products and services compliance
To design, develop, and improve every product and service so that they meet the needs of all your customer personas:
Consumer support compliance
To ensure customers are aware of and have access to all communication channels, and provide them with the right support for changing products or moving provider:
What research tools does Indeemo offer for Consumer Duty compliance?
Regardless of the method, the Indeemo platform offers a range of research tools that can help. Because Indeemo captures rich, multimedia, contextual insight, you can use the data to augment surveys and analytics with real-life evidence that underpins and brings compliance to life.
As the FCA has stated, one of the main goals for firms complying with Consumer Duty is that they should be able to "put themselves in their customers' shoes." That's what Indeemo is designed to help with.
Consumer understanding: discovery research tools
Whether you're doing strategic research for new market opportunities, generative research for new product ideas, or simply building a better understanding of your customers:
- Mobile and digital ethnography
- Diary studies
- Pre-tasking your focus groups and IDIs
- Bringing segmentations to life with video responses
Using the Indeemo participant app and researcher dashboard, your customers can use photos, videos, texts, and mobile screen recordings to help you walk in their shoes, share a week in their lives, or diary their in-the-moment experiences as they interact with your product or service.
Price and value: path-to-purchase research tools
Banks already conduct competitor analysis and price benchmarking in various ways. To prove and validate the quantitative data, researchers need a deep understanding of the retail customer's path to purchase — particularly important when proving compliance across the entire distribution chain.
Indeemo offers:
- A path-to-purchase capability that helps you understand omni-channel purchase journeys for every product and service
- Mobile screen recording for remote research into how consumers react to your communications and marketing, and for usability testing
- Diary studies that let customers keep a diary as they consider purchasing a financial product or service
- Journey mapping to help you understand every actor across every stage of the distribution chain, including end customers and intermediaries like agents, partners, or brokers
Products and services: prototype, usability testing, and journey mapping
For products and services, Indeemo has tools to help you research how your customers interact with your comms, apps, websites, branches, and written communications:
- Mobile screen recording to understand how customers interact with your digital media
- Product testing and concept testing for communications, advertising, or prototype products and services
- Journey mapping for the end-to-end journey of a customer across the full product or service lifecycle
- Iterative research if you're developing new products or services and want to test prototypes over time before launch
Consumer support: customer experience research tools
Consumer Duty doesn't stop once a product is sold. To prove compliance, you need to understand how customers experience your products and services and how their needs are met over time. You also need to understand their end-to-end experience from an initial Google search to purchasing a product and actually living with it.
For consumer support research, we recommend:
- Customer journey mapping that gathers multimedia data from customers as they interact with any product, service, or omni-channel experience at every stage of their journey
- Digital ethnography for longitudinal, customer closeness research that lets you virtually live with customers over long periods and assess the benefit and value of your products
- CX research for tactical, contextual qualitative work to augment analytics or NPS and deepen your understanding of how you support customers
Why is customer journey mapping critical for Consumer Duty?
Customer journey mapping plays an integral role in mapping every journey of every customer persona for every product and service you offer.
Having up-to-date, contextual journey maps for every product, service, and customer persona is a strong way for financial institutions to prove Consumer Duty compliance. Indeemo's interactive journey maps bring to life every touchpoint of your customers' experience as they interact with your product or services across the full lifecycle and distribution chain.
As you learn about your customers and their behaviours, you can use Indeemo to prepare a journey map for each customer persona or consumer segment. This lets you distinguish between behaviours and build a list of diverse characteristics directly informed by the journey your customers take. It also helps you see, hear, and prove the quality of their customer experience — whether the journey is online, offline, or both.
What security is needed for vulnerable customer research?
The Indeemo platform is already used by UK financial institutions for market research and UX/CX work. We hold SOC 2 Type II, ISO 27001:2022, and FSQS certifications, and our platform has been independently penetration tested and certified for handling highly confidential information by some of the UK's largest banks. That means it meets the stringent information security requirements needed to conduct sensitive research with vulnerable customers.
We know first-hand how complex onboarding research platforms into financial institutions can be, and how long it takes. If you choose to work with Indeemo, we'll get through your onboarding process cleanly.
How does Indeemo support Consumer Duty research?
Regardless of your Consumer Duty research requirement, Indeemo can be deployed for a wide range of market research, UX, and CX projects. The platform supports the full qualitative workflow:
- Recruit B2C and B2B participants in hours from a panel of 3 million+ participants
- Capture in-the-moment videos, photos, screen recordings, and texts in 30+ languages
- Use generative AI for summarisation, translation, thematic analysis, and sentiment analysis to speed up analysis significantly
- Build multimedia customer journey maps across the full lifecycle
- Import follow-up interviews from Zoom or Microsoft Teams for deeper probing
- Create subtitled highlight reels to share customer voice with compliance, product, marketing, or leadership teams
We can help you get a deeper understanding of every customer persona and consumer segment. We can help you map every customer journey and, in doing so, accelerate your progress towards Consumer Duty compliance.
Do you need an in-house research team to meet Consumer Duty compliance?
No. Whether you're a financial institution with a large research function or a smaller firm working towards compliance with limited resources, Indeemo can support you.
Use the platform independently, or partner with our Catalyst team for study design, recruitment, moderation, and analysis. Our strategists are experienced at working with highly sensitive research for UK financial institutions. If you have compliance ambitions but not the in-house capacity, we can lend a helping hand.
Frequently asked questions
When did the FCA Consumer Duty come into effect? The Consumer Duty came into force for new and existing products on 31 July 2023, and for closed-book products on 31 July 2024.
Does Consumer Duty apply outside the UK? No — the FCA Consumer Duty specifically applies to UK-regulated financial firms. That said, other regulators are watching closely, and similar customer-centric frameworks are being considered in other jurisdictions.
What research methods work best for researching vulnerable customers? Methods that respect participant dignity, privacy, and agency tend to work best. Diary studies and mobile ethnography allow participants to share their experience in their own time and environment, with fewer of the power dynamics that affect in-person research settings. Enterprise-grade security (SOC 2 Type II, ISO 27001, FSQS) and careful recruitment are essential.
How does journey mapping help prove Consumer Duty compliance? Journey maps give firms a documented, evidenced view of how every customer persona experiences every product and service. When regulators or internal compliance teams ask how you've verified that customer outcomes are being delivered, journey maps backed by real participant data are a strong form of evidence.
Can Indeemo be integrated into a firm's existing compliance workflow? Yes. Indeemo supports a range of export formats, integrations, and audit trails suited to the compliance requirements of financial services organisations. Our team works directly with client compliance and IT functions during onboarding.
