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31 August 2023

How to use a single customer view to deliver the best outcomes for Consumer Duty regulation

James Mackenzie

Providing positive vulnerable customer outcomes by unlocking value in data.

In July 2023, the Financial Conduct Authority (FCA) launched the Consumer Duty regulation, requiring all financial service providers to protect vulnerable customers across products and services.

This has seen a significant amount of preparation across affected organisations as they try to bring together countless, disparate data sources, often in non-consistent formats, to deliver the mandatory FCA dashboards.

For many, this is easier said than done. For years, providers have been product led – either by choice or by acquisition. This has allowed complex data sets, platforms and architectures, aligned to the go to market product offering, to build up and support business operations.

The challenge with Consumer Duty is that this approach has now been turned on its head. Not only do businesses need to understand vulnerability at a product level, they need to understand how a customer interacts across the whole offering.

Those safety nets that have grown don’t easily integrate across multiple internal products or allow the use of third party data. This builds to such an extent that the first contact support team often don’t know if the customer on the phone is truly in a place of vulnerability. 

There is, however, a solution. And the ability to think smart with data is at the heart of that. Firstly though, it’s worth understanding exactly what the FCA are looking for.

What the Financial Conduct Authority (FCA) want to see

As part of the the Consumer Duty regulations, the FCA are looking for organisations to continually prove three things:

  • Vulnerable customers are protected.
  • Target markets are well defined and targeted appropriately.
  • Consumers understand the goods and services offered.
Consumer Duty implementation timeline

The underlying principle of consumer duty is that firms must act to deliver good outcomes for retail customers. This constitutes acting in good faith towards customers, avoiding foreseeable harm and supporting customers to pursue their financial objectives.

How can thinking simply about data help businesses fulfil Consumer Duty needs?

The temptation when creating the required FCA reports is to look at the existing data platforms and structures whilst trying to amend all the various products at source. This is complex, costly, risky and, most importantly, isn’t guaranteed to provide the results needed.

Reason being, it only looks internally and doesn’t deliver critical third party data to help customers. 

By contrast, the creation of a single customer view, on a new data platform, allows you to achieve a simple and cost effective solution that brings together all the internal and external data in one place, allowing the creation of an in depth view.

Getting started with a single customer view

There are three questions to ask when building an single customer view:

  • What data do you currently use internally?
  • What internal data aren’t you using and why?
  • What external data is available and how can this be used?

The start point is to piece together the data at the heart of those questions.

The data you are already using is the bedrock of creating the single customer view. However the other internal and external data is likely to require restructuring to help it match.

It is almost certain that some or all of this data is in different formats, requires different delivery mechanics or is recorded across different time frames.

Therefore the best approach is not to change any core platforms, but use a single customer view to create a new environment within the business to ingest, standardise and onboard this data. 

This can be achieved, simply and straightforwardly, in a cloud environment that brings together:

  1. Internal data
    • Product data – derived from customer interactions with specific products over time.
    • Customer Identification data – derived from what you know about your customers across your whole business.

This internal data can, if needed, be restructured to deliver a consistent approach to allow analytics to be applied. This removes the need to change core functions to deliver internal consistency.

  1. External/third party data
    • Sharable customer data – derived from vulnerable customer service providers within the GDPR legitimate usage.
    • Market data – derived from the market insights around vulnerable customers.

This data can then be restructured to match the internal structure, allowing customer matching to take place. This creates a simple and easy to understand customer behaviour environment allowing a clear view of vulnerable customers.

Protecting vulnerable customers in practice

We work extensively with organisations protecting vulnerable customers and have created, alongside GAMSTOP, a world class solution to prevent customers from gambling in the UK.

The GAMSTOP platform creates a single customer view of a person’s gambling activity with GB based gaming operators, linking with the register to search for excluded customers during the login process.

380,000+ names are analysed and reviewed for matches, with results being returned as a Yes, No or Investigate to the operator in less than 300 milliseconds.

The platform that manages the PII data, customer matching facilities and API connections was created, and is run, by Hippo Data.

This innovative approach was awarded ‘Best Tech for Good’ by the British Data Awards in 2022 and has prevented nearly 400,000 people from the harm of gambling.

The power of a single customer view

A single customer view avoids the need to change any core operating systems or platforms whilst giving the organisation flexibility around optimising third party data to fulfil the requirements for Consumer Duty.

This can be created and put into action to deliver value quickly and simply, allowing you to take the lead for your vulnerable customers. 

To find out more about how Hippo can support your data journey, meet FCA regulations and provide a greater all round service to your customers, get in touch today.