Strategic Intelligence: Regulation in Banking - Consumer Duty

Consumer Duty legislation in the UK is a paradigm shift in consumer protection, setting a much higher bar for duty of care. It is no longer sufficient for financial services providers to follow checklists and guidance to avoid harm to customers. Banks are now required to take responsibility for ensuring the right “outcomes”. These outcomes must be evidenced to the regulator on an ongoing basis and apply across all products and all processes. This is clearly an enormous undertaking, requiring an operational function that will likely far exceed that required to comply with initiatives such as PSD2 and GDPR. No other jurisdiction has sought to mandate customer-centric transformation in this way-not least because so many banks have already spent millions in trying to deliver these outcomes voluntarily. It begs the question, do we have this mandatory regime now because UK banks have been unable or unwilling to deliver this voluntarily, or is the new regime unnecessary or overzealous?

In this report, we use the analyst consumer survey results to review customer satisfaction in areas comparable to Consumer Duty to comment on the efficacy of this new regime. Overall, we did not find consistent evidence of The Duty appearing to improve customer satisfaction of UK banks in either absolute terms or in relation to the rest of the world. UK banks already enjoyed world-leading satisfaction scores in several key areas within the Duty; across the review period, some scores dropped in key areas, such as customer support, while in others they fell-but less markedly than international averages.

Scope

• UK banks score among the best in the world at providing a clear understanding of their customers’ finances, and they are managing to do this with digital money management tools. Across the duty compliance period (2023 to 2024), satisfaction with these tools among UK banks was significantly above the global average.
• UK consumers’ satisfaction with their banks offering competitive prices is above the global average and remained flat across the review period. This is encouraging, suggesting that UK banks are passing savings rates on to consumers and reducing fees.
• A critical aspect of customer support is easy access to branches and call centers, where UK satisfaction scores were the worst across examined metrics, with the UK average at 66% in 2024 (compared to 72% globally). This suggests this is an area where UK banks are not satisfying customers, despite it being a key dimension of Consumer Duty.

Reasons to Buy

• Understand the core focus areas of Consumer Duty legislation in the UK, and how that compares to other regulatory approaches, both in terms of focus and approach.
• Understand which technology investments are helping banks in the UK and elsewhere deliver on the customer experience elements prioritized by the Duty and why.
• Understand how various macroeconomic and social trends in the UK are complicating Duty compliance, and raising the bar for providers that must deliver the right outcomes.
• Access granular consumer survey insight in areas comparable to the Duty to see how the UK has performed across the Consumer Duty compliance period.