The Financial Conduct Authority (FCA) has recently reinforced a key message under the Consumer Duty, firms must move beyond simply collecting management information and instead use it to genuinely understand their customers’ experiences and improve outcomes. While this expectation applies across financial services, it is just as important for Appointed Representatives (ARs) operating within the consumer credit sector.
For many ARs, outcomes monitoring can feel like another compliance exercise. However, the FCA’s latest commentary makes it clear that monitoring customer outcomes is not about producing reports for the sake of governance. It is about identifying where customers may be experiencing difficulty, recognising emerging risks early and taking action before consumer harm occurs.
The FCA found that firms demonstrating good practice were those that looked at the entire customer journey rather than relying solely on traditional compliance metrics. They combined complaints data, customer feedback, quality assurance findings, call monitoring and operational data to build a complete picture of the customer experience. Importantly, they could demonstrate how this information led to tangible improvements in products, processes and customer support.
For consumer credit ARs, this presents an opportunity to strengthen compliance whilst improving relationships with Principal firms. Rather than simply reporting volumes of complaints or completed sales, ARs should consider whether their management information demonstrates how customers are actually faring throughout their journey.
Questions worth asking include:
- Are customers progressing through the sales process without confusion?
- Are vulnerable customers receiving appropriate support?
- Do complaints identify recurring issues that require changes to processes or communications?
- Are customers successfully using the products or services they have purchased?
- Is customer feedback being analysed and acted upon?
Principals are increasingly expected to oversee the customer outcomes delivered by their ARs. This means ARs that can evidence strong outcomes monitoring are likely to place themselves in a much stronger position during oversight reviews and regulatory audits.
The FCA also reminded firms that monitoring should be proactive rather than reactive. Waiting until complaints or regulatory issues arise is unlikely to satisfy Consumer Duty expectations. Instead, firms should establish meaningful key performance indicators, regularly review customer data and be able to explain what actions have been taken when poor outcomes are identified.
Ultimately, effective outcomes monitoring is about creating a culture of continuous improvement. For Appointed Representatives, this means using data to understand the real customer experience, sharing meaningful information with Principal firms and demonstrating that consumer interests remain at the centre of every business decision. As the FCA continues to embed the Consumer Duty across all sectors, firms that can evidence this approach will be better placed to meet regulatory expectations and build greater trust with both customers and regulators alike.
