James Towner, Chief Growth Officer at ArvatoConnect, explores how balancing human touch and AI will be key to delivering great customer outcomes for Consumer Duty compliance.
The Consumer Duty, introduced in July 2023, has been hailed as the biggest shake-up in financial services regulation in decades. Its goal? To spark a cultural revolution, putting customer outcomes at the centre of every FCA-regulated business.
While firms are making progress, with our Navigating Consumer Duty report finding that 77% acknowledged the need to shift away from sales-driven mindsets, the journey is far from over.
Recent FCA plans to cut ‘unnecessary regulations’ to help meet the government’s drive for economic growth may bring minor changes. However, the real challenge remains: transforming company culture and consistently improving customer outcomes.
So how can firms achieve this?
To meet both regulatory and customer expectations, financial services firms need to strike the right balance between technological innovation and human-led service. With more than half of firms (51%) prioritising AI and automation, and a third focusing on maintaining the human touch, the challenge lies in integrating these elements seamlessly to create positive customer experiences.
Yet a third of firms admit that integrating AI and automation is a key hurdle, especially while also maintaining the personal touch customers still expect.
This is where digital orchestration comes in – using technology in the right places and at the right times to optimise customer service without losing the empathy and judgment that human agents provide.
A proven framework to follow for achieving this balance? The Four Ds:
Define key challenges in the customer journey – By reviewing workflows and identifying bottlenecks, firms can pinpoint areas where automation can have the greatest impact. Using AI-powered analytics helps uncover opportunities that may have been overlooked with traditional manual checks.
Design tailored solutions to tackle them – Once key issues are identified, firms need to design solutions that leverage both AI and human expertise. For example, AI can automate repetitive tasks like data extraction from financial documents, freeing up human agents to focus on emotionally complex, judgment-based and creative tasks.
Develop tools and processes that align with customer needs – Seamless integration is key. Tools like AI-powered chatbots, workflow automation and customer query routing systems should work in harmony with human agents to ensure quick resolutions and an efficient customer journey.
Deploy solutions with ongoing evaluation and continuous improvement – Implementing solutions is only the beginning. Firms must continue to evaluate and refine their AI-human hybrid approach by gathering feedback, tracking customer outcomes and adjusting to emerging technologies and changing customer expectations. This ongoing process of continuous improvement is essential for long-term success in meeting Consumer Duty.
Ultimately, blending AI with human expertise, guided by the ‘Four Ds’ framework, is how financial services firms can successfully meet Consumer Duty goals.
With one in ten customers feeling no significant improvement in their experiences since the launch of Consumer Duty and the latest regulatory focus on enhancing customer service – especially for vulnerable customers – it has never been more vital to humanise the digital and digitise the human.
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