On July 25, 2023, Britain's financial watchdog, the Financial Conduct Authority (FCA), called on financial firms to improve their interactions with customers and offer faster assistance amid a
cost of living crisis. As stricter consumer protection regulations are set to be implemented next week, the FCA emphasized the need for firms to enhance their customer service.
The FCA's Financial Lives survey revealed that during the 12 months leading up to May 2022, 7.4 million individuals encountered difficulties while attempting to contact their financial services providers, with no success. Furthermore, 4.9 million people who relied on firm communications to aid their decision-making process found it unhelpful.
To address these issues, the FCA will introduce its new "consumer duty" on the following Monday. The regulation mandates firms regulated by the watchdog to demonstrate their commitment to achieving positive outcomes for customers. This includes providing helpful and responsive customer service, delivering useful communications, and ensuring fair value for money on products.
While acknowledging that some progress has been made, the FCA emphasizes the need for further improvement. It is particularly concerned about individuals facing financial difficulties and aims to prevent them from falling into a cycle of harmful and unaffordable borrowing.
StepChange, a debt advice charity, supports the FCA's efforts, stressing the importance of early assistance for those displaying signs of financial strain.
According to the survey, less than half of UK adults (21.9 million people) expressed confidence in the financial services industry. Moreover, only 36% agreed that most financial firms treat them honestly and transparently.
The survey also revealed a shift in banking behavior, with 88% of adults using online banking or mobile apps in 2022, compared to 77% in 2017. This indicates an increasing reliance on digital financial services. Photo by Philippe Salgarolo, Wikimedia commons.