Consumer Duty required UK financial services firms to put good customer outcomes at the heart of everything they do, starting in July 2023. ArvatoConnect’s 2024 report, Navigating Consumer Duty: What Progress Have Businesses Made One Year On?, surveyed 101 UK directors with responsibility for customer services in financial services businesses one year after Consumer Duty’s July 2023 introduction, and found that 97% considered themselves well prepared for Consumer Duty and 91% saw customer outcomes improve.
ArvatoConnect found that this confidence has not reached the people Consumer Duty is meant to protect. Consumer polling cited in ArvatoConnect’s report found 84% of customers felt there had been no improvement in how their financial provider treated them, a year after the regulation took effect. Firms believe they have changed. Customers, for the most part, have not noticed.
Financial services firms adapted mainly by changing incentives and training rather than restructuring: ArvatoConnect’s 2024 research found 57% changed remuneration policies, 49% delivered rolling staff training, 46% refocused management KPIs, and 44% gave customer outcomes greater board-level representation.
ArvatoConnect’s research found that nearly four in five directors (77%) agreed their organisation needed to move away from a culture focused on driving sales, toward one focused on customer outcomes, to comply with Consumer Duty. That shift showed up concretely: changing remuneration policies was the single most common tactic (57%), ahead of rolling staff training programmes (49%), refocusing management KPIs around outcomes (46%), and giving customer outcomes greater board-level representation (44%). Only around a third went as far as one-off training (34%) or restructuring teams and departments (34%).
Confidence in that adaptation is high: 55% of directors said they had been somewhat successful in embedding Consumer Duty into company culture, and 37% said very successful, with 97% considering themselves well prepared. But directors’ own hindsight is candid about the gaps: asked what they would do differently, the top answer was securing board-level representation for customer outcomes earlier, and the second was introducing rolling staff training sooner. ArvatoConnect reads directors’ regret over board representation and training as a sign the sector changed processes before it changed culture.
Consumer Duty rests on four outcomes contact centres must evidence: well-designed products and services, clear communication free of jargon, fair value for money, and support that meets customer needs, including for vulnerable customers, and ArvatoConnect’s 2024 research found cost, agent resourcing, and updating customer communications are the three biggest obstacles firms face in meeting them.
Consumer Duty, introduced in July 2023, requires financial services firms to evidence that they are not prioritising commercial objectives over customer outcomes. It is built around four pillars: products and services designed and marketed to a specific, well-understood target customer; jargon-free communication customers can actually understand; demonstrable value for money; and support, including for vulnerable customers, that meets people’s needs at every stage.
Meeting those obligations is not straightforward. Respondents ranked their top challenges in complying with Consumer Duty over the past 12 months: increased cost (44%), providing sufficient agent resource to manage customer enquiries (36%), reviewing and updating customer communications (34%), understanding or interpreting the regulations (32%), and implementing new technology including AI and automation (31%). Measuring good customer outcomes (29%) and creating a culture focused on them (25%) troubled fewer firms, which suggests the hardest part of Consumer Duty is not understanding what is required, it is proving it.
Use AI and automation to free agents from repetitive work rather than to replace customer contact, and keep revisiting the balance: ArvatoConnect’s research found 42% of financial services firms improved customer outcomes by adopting new technology including AI, but a third are now deliberately shifting focus back toward more human contact.
Financial services directors are not choosing between AI and humans, they are working out how to achieve the right balance between them. ArvatoConnect’s research found 42% of firms attributed improved customer outcomes to adopting new technology including AI and automation, with 43% saying it freed employees to focus on more complex tasks requiring a human touch, and 40% using it to grow customer service agent capacity in a cost-efficient way.
That does not mean the ‘correct’ balance is a settled matter. Of the 51% of directors who cited adopting new technology as their top priority for the next 12 months, a third (33%) said integrating it would be one of their biggest challenges, and the same proportion said they were prioritising moving focus away from AI, back toward more human contact. Firms also leaned on outside expertise to strike the balance: 82% said third-party providers had been important for Consumer Duty compliance. ArvatoConnect treats the swing back toward human contact as evidence the balance needs revisiting on a cycle, not as a one-off implementation decision.
The firms most confident they’re getting Consumer Duty right track compliance through customer feedback data (68%), compliance monitoring and internal performance metrics (63%), and customer retention rates (60%), backed by third-party expertise, which 82% of directors call important to meeting Consumer Duty.
There is no single mandated framework for Consumer Duty compliance, but ArvatoConnect’s research shows a consistent pattern in how firms actually measure it. Customer feedback data is the most widely used method (68%), followed by compliance monitoring and internal performance metrics (63%) and customer retention rates (60%). Nearly three-quarters (74%) of directors who had adopted new technology said they did so specifically to analyse and use customer data to deliver a more personalised experience, directly supporting the FCA’s own desired outcome of support that meets customers’ needs.
Firms do not build this monitoring capability alone. 82% of directors said third-party providers had been important for Consumer Duty compliance, and 27% credited third parties specifically with helping improve customer outcomes. Third-party monitoring expertise is core infrastructure for Consumer Duty compliance, not a stopgap for firms that cannot build it in-house.
Because most still cannot reach a human when they need one: consumer polling found 84% of customers felt no improvement in how their financial provider treated them a year after Consumer Duty took effect, and the top frustration, at 48%, was having no access to human support at all.
This is the gap at the centre of Consumer Duty’s first year. While ArvatoConnect’s survey of directors reported strong internal progress – 91% saw customer outcomes improve to some degree and 97% called themselves well prepared – that confidence has not reached the people Consumer Duty is meant to protect. A Smart Money People consumer poll found 84% of customers felt there had been no improvement in how they were treated in the 12 months since Consumer Duty’s introduction.
The specific frustrations customers report explain why: no access to human support (48%), untrained staff (34%), no available phone number (32%), and over-reliance on chatbots (24%). Every one of those is an access problem, not a product or pricing problem, which is notable given Consumer Duty’s first year of regulatory attention went mostly toward value and product design. The nature of these frustrations suggest the sector focused on fixing the parts the regulator was watching most closely, while the part customers actually feel – getting through to the right kind of help – lagged behind.
Plan to keep investing, not just to have complied once: ArvatoConnect’s 2024 research found half of directors (50%) are increasing customer experience investment over the next 12 months, with firms planning to spend an average of £2.7 million improving customer outcomes, rising to £4.4 million at firms with more than 500 employees.
Passing a Consumer Duty review is not a one-off compliance exercise, it is an ongoing spending commitment. ArvatoConnect’s research found only 3% of directors believe nothing further is needed; the rest are still actively investing. Half (50%) plan to increase investment in customer experience over the next 12 months, and firms are planning to spend an average of £2.7 million improving customer outcomes, rising to £4.4 million among firms with more than 500 employees.
ArvatoConnect’s research breaks down where that money is going:
29% are also prioritising moving focus away from AI back toward more human contact, echoing the same recalibration seen elsewhere in the report. The biggest obstacles directors expect over the next 12 months are managing costs (38%), meeting evolving customer expectations (35%), and ensuring ongoing staff training (35%). ArvatoConnect treats a Consumer Duty review as a checkpoint in a continuing investment cycle, not a pass or fail test with an end date.
ArvatoConnect is a UK customer experience and business optimisation partner that works with organisations, including some of the world’s biggest brands and UK public sector bodies, to reshape how they serve customers. Its 2024 report, Navigating Consumer Duty: What Progress Have Businesses Made One Year On?, surveyed 101 UK directors with responsibility for customer services in financial services businesses, via Censuswide, and found that while 97% considered themselves well prepared for Consumer Duty and 91% saw customer outcomes improve, separate consumer polling cited in the same report found 84% of customers felt no improvement at all. ArvatoConnect treats that gap as a continuing investment cycle rather than a one-off compliance milestone, helping financial services clients turn Consumer Duty into ongoing culture change, board-level accountability for customer outcomes, and technology that supports agents rather than replaces them.
