How the FCA's Consumer Duty of Care has made Speech Analytics Essential

Speech analytics has been commonly used for a number of years, evolving from a novelty add-on to a powerful solution for businesses to improve their processes. With the Financial Conduct Authority’s Consumer Duty of Care proposal, speech analytics has gone from being a nice-to-have to a necessity that firms must adopt to meet requirements or risk regulatory sanctions by the FCA. Speech analytics also powers business improvement beyond helping firms become compliant with regulations. According to Aberdeen, firms with AI capabilities report 11.5x greater annual improvement (decrease) in service costs.

Implementing speech analytics solutions engineers broad-ranging improvements like boosting Quality Assurance efficiency and sharing reliable outputs to improve services, flagging potential product development insights, ensuring agents are focusing on the highest risk calls, identifying room for product coaching, etc. 

The Consumer Duty of Care proposal aims to bring about a higher standard of outcomes for consumers, outlining specific requirements for firms to comply with. However, the current processes of many firms are riddled with company growth-focused standards with little or no measure for consumer outcome. This approach is in absolute misalignment with the Consumer Duty of Care and needs a complete overhaul. The challenge lies in how firms can comply with the Duty and evidence it, all before the April 2023 deadline, and it’s definitely not by using the same clunky, manual processes of the past.

It is unclear how companies can meet these expansive regulatory changes that involve a seismic shift away from their existing processes except by turning to technology, specifically, speech analytics. Speech analytics has become an essential regulatory tool for companies to secure their business against reputational risk. With its comprehensive monitoring and analytics capabilities, it has propelled itself into the spotlight as an essential tool for financial firms to be compliant in numerous ways:

Monitoring and analysing 100% of customer interactions

By positioning speech analytics as a machine line of defence, firms can automatically assess 100% of calls to identify any risk, including vulnerable customers, agent misconduct, non-adherence to regulatory scripts, complaints, expressions of dissatisfaction, etc. 62% of customers prefer personalised products and services. The capability to monitor all consumer interactions is the ideal way for firms to receive direct and unfiltered information from their customers and incorporate their feedback to increase the effectiveness of quality assurance processes and create personalised products and services that better align with their needs. 

Assessing the high volume of calls and other consumer interactions manually without AI is time-consuming, inefficient, and prone to a poor identification rate of consumer vulnerability. Typically, firms that currently do this analyse just 1% of calls resulting in losing insights from the remaining 99%. This only worked in a time when firms could focus on company growth metrics alone without the risk of regulatory sanctions. Using speech-driven machine assessment of all interactions can help effectively monitor all interactions and mitigate the risk of being fined and regulatory sanctions from the FCA.

Identifying high-risk calls and proving the outcome 

Consumer vulnerability has increased due to the rising cost of living and the ongoing energy crisis. Currently, many firms have no set process to identify risky calls that might contain a complaint or indicate a vulnerable customer; even when they do, handling these calls is not prioritised. With the new Duty, identifying high-risk calls, handling them, and proving the outcome is no longer optional. Instead, firms have to prove to the FCA that they are monitoring calls, assessing high-risk interactions, and have a process to appropriately handle complaints, provide support, and improve customer outcomes. 

Financial firms can only achieve this by implementing AI-driven solutions with the capability to analyse everything from voice calls, chat, and video conferencing to emails and social communication. As a result, high-risk calls will be flagged and auto-assigned to assessors, removing the need to review calls manually. With this significant increase in coverage, companies can derive more actionable insight from these interactions, support customers better, decrease complaints, improve outcomes, and put evidence in place for the FCA to protect against reputational risk and regulatory censure.

Enabling board members to prepare for Consumer Duty

The Duty makes it clear that senior management and personnel who operate on a board level have greater responsibility in ensuring the company is taking steps to achieve good customer outcomes. It’s no longer enough for them to just review high-level reports and feedback without having the full details of how customers are responding to their processes and what their outcomes are. The onus is now on the Board to better understand the reasons behind consumer complaints and oversee the company’s responses and processes to mitigate them. 

Knowing the extensive responsibilities board members have, how achievable is it for them to take a grassroots approach and keep up with consumer concerns and the company’s processes to resolve them? You could argue that there is value in them being able to listen to a sample of the highest risk consumer interactions and receiving a data-based report on customer complaints, the reasons behind them, and remedial actions taken by the firm to ensure the best outcomes. A solution like speech analytics is the only way to achieve that level of insight for the board or risk committee. 

AI-driven platforms have become even more indispensable at a time like this when firms are struggling to comply with regulations.​​ Three quarters (73%) of advisers have concerns about the FCA’s planned Consumer Duty rules and guidance, and understandably so, as the FCA hasn’t set out clear, practical steps on how firms should comply. By embedding AI in the heart of customer operations, firms can improve their processes, power business growth, and ensure they meet their regulatory responsibilities.