Customer Experience Superheroes - Series 11 Episode 1 - CX & Consumer Duty - James Edmonds

In Lexden's latest CX Superheroes podcast episode we kick off series 11. And what better way to do it than in conversation with Investor in Customer's James Edmonds. In conversation with host and former colleague of James at Lexden and client at RSA, the discussion focusses in on the new Financial Conduct Authority regulation; Consumer Duty.  James shares his evidence on how financial services brands are adjusting their ways of working to address the four principles which underpin Consumer Duty. 

The discussion broadens out to the impact of regulatory governance on customer experience ambitions and deliverables with both providing first hand experience of the catalyst and constraints that organisations deal with when regulation is a mandated stakeholder for CX in a business. 

James also helps listeners appreciate the support and guidance available to business' struggling to get to grips with, or take advantage of the well intended new legislation. 

Regardless of whether you are associated to financial services, or a company in a regulated sector, it sheds light on what happens when your CX is partly directed by others. 

Transcript

SPEAKER_01 0:10

Hello and welcome to the latest episode of the Customer Experience Superheroes. This is the podcast series in which I, Christopher Brooks, your host, introduce you to a plethora of experts from the very broad world of customer experience. We share with you their ideas, their ideals, their innovations, and their insights and hope it inspires you in the work that you do. We bring you practitioners who are dedicated to certain aspects of customer centricity, as well as individuals who are leading teams through transformations or managing organizations supporting the industry of customer experience. Today's guest is a particular fondness to myself because we've worked together in a number of different capacities over the years. We're going to meet James Edmonds. James, who currently resides with investors in customers, is a committed customer experience practitioner, always looking to deliver a quality outcome and improve the standards wherever he goes. I first met James whilst he was at Royal Sun Alliance. I provided consultancy services to him, and then gratefully he agreed to join our organization. We had some wonderful times making some great improvements to the organization's customer experience strategies. Latterly, he's been back in the world of financial services, and now with increasing regulation around consumer duty, finds himself in the middle of a very interesting time for financial services and customer experience in the UK. We caught up with James to understand how he's involved in this area and the sorts of changes he's seeing happening, but also what he'd like to see done more. Okay, welcome to another episode of CX Superheroes. And on our journey, we get to meet some really interesting people. For me, this is this is personally quite a fulfilling because I'm I'm going back to meet up with James Edmonds, who I've had the pleasure of working with in a number of capacities in the past and followed his career with great interest. James is in a really exciting role, working on a very, very important piece of legislation that's going through. We're going to find out all about that. But for now, James, welcome to the CX Superheroes podcast.

SPEAKER_00 2:28

Thank you, Christopher.

SPEAKER_01 2:28

Great to be here. Well, look, as I say, our paths are crossed in the past. So before we get into talking about investors in customers, and before we get on and talk about consumer duty, which is the piece of regulation we're going to talk about today and what that means for the financial services industry. Take us back. Take us back to kind of your journey, how you've ended up being in the role you're in, and kind of how you've navigated your way through the world of customer experience to get there.

SPEAKER_00 2:54

Yeah, indeed. Well, I suppose I left university with a um fairly normal degree from Brighton University, but very much took the view when I left that it would be better to get into a big company with a lot of diverse opportunities than it would be to necessarily attempt to find the perfect career that ran perfectly in line with my degree. So as chance had it, I moved to Legal in General, who had just opened up a large new offices in Hove and found myself in an environment I really enjoyed working in. So I was working with a great team, very much focused on the customer as Legal in General generally are, and was talking to uh customers about their pensions and investments with Legal in General quite quickly. Um, I moved into an MI-based role within um Legal in General in a particular department. And then I think I probably realised that there was a bit of a wider world outside of Hove and a couple of people senior to me, moved out of uh Legal in General into roles up in London. And then at that point, um, with a bit of a data background, I moved into a role at Royals and Alliance up in London in the professional financial uh commercial insurance. And that really was a great role whereby we were developing new propositions. I was doing a little bit of MI for the function as well, but through the proposition work, began to get a feel for um the importance of roles that involve the customer. And I think ever since then, those have been the roles that I've always sought within financial services, purely because I think there aren't that many roles within financial services that have much soul to them. So I like to actually do something where you can feel like you're making a difference to the customer. A lot of roles aren't that way inclined within financial services. So spent about eight years at Royal Sun Alliance. I look back on that time greatly. Obviously, uh that was when we first met when uh I was working on the Morland Customer Programme. You came in and did some great work for us around cross-selling. Uh and yeah, moved on for Royal Sun Alliance, um, which was when I joined Lexington and we worked together for about a year on some great projects. Again, since then, all the work has always been very much customer focused, uh, and then moved on to just retirement, where I took over responsibility for their customer proposition. It was when we'd done some great work on our customer proposition at just retirement that I decided to take on responsibility for vulnerability as well, which is obviously a much more well-understood area now than it was a few years ago when I began to work on it. Uh so I took on responsibility for the Just Retirement Vulnerability Program, along with my manager then at the time, and then moved on to a role at James Hay as the head of customer experience and insight, and again put up my hand for the vulnerability responsibility. And really, I suppose at that point developed a bit of a specialism around interpretation of FCA guidelines, interpreting them for a business to move them into a space where they were a more tangible set of um activities that an organization could undertake, not only to improve their processes internally, but also to begin to differentiate this experience that they offer using the regulation as a bit of a catalyst for that.

SPEAKER_01 5:58

Excellent. And then from that point onwards, you finishing with James Hay. You're now what is your role as investors in customers?

SPEAKER_00 6:06

So I'm a director of investor in customers. So there are three three directors. Um my role uh predominantly wasn't coincidence when I was brought into the organisation. So uh obviously James Hay and Nucleus um were uh became one organisation towards my end of the end of my time there when I was ahead of customer experience uh and insight there. Investor in customers were actually one of the organizations that we use to help us with our voice of the customer metrics. So, really, for investor in customers, the organization is at a place where, with a specialism in financial services, as well as obviously a focus on customer experience that's been running through the organization for 16 or 17 years, it was just the perfect point for someone to join to develop the proposition, not only from the consumer duty angle, but also to bring on the consumer duty proposition. So we're able to offer to all of our clients services that help them out when it comes to their measurement and evidencing obligations around consumer duty.

SPEAKER_01 7:03

Brilliant. That's uh that's great, James. Thank you very much. Now, a couple of things in there. You you mentioned um investors in customers, and I just want to pause and understand a little bit more about the role of the organization because obviously, as you mentioned, you work with us and we had some great times um over in the Philippines. I remember at one particular point looking at outsourcing and some great, great work we did there together. Um, but uh it's a different sort of kind of advisory organization. So would you mind just kind of unpacking it its purpose and its role, please?

SPEAKER_00 7:35

Yeah, absolutely. So investor in customs, we've been around for about 17 years now. Our core work historically has been in awarding organizations, regardless of their sector, uh, a customer experience accreditation. So we would be assessing organisations through a one-off deep dive study. We would call it 360 globe. So we would be doing a survey of senior management, employees within the organization, the customers, and then investor and customers do a bit of an assessment themselves. So it gives that real 360 view. We run the assessment versus our customer experience framework, private and tested. We'd uh surveyed over 4 million customers and run assessments with over 300 businesses. And then, as I say, we would be awarding organisations based on how well they perform versus our customer experience framework. More recently, though, as per what we've already spoken about, we've moved into widening our proposition. So we're emerging with another organization to bring a voice of the customer platform to what we can do, which makes us much more agile as an organization that are able to offer always on type surveying, which really gets us to the point where um our consumer duty offering is is one that we can adjust to be whatever a different organization might need it to be.

SPEAKER_01 8:50

Excellent, excellent. So a great organization for someone who is wanting to get a sense of are we going in the right direction, how are we doing things, or even if starting out on the journey. But obviously, I think those of us who are in the financial services circles are very much aware of investors in customers, but you're not limited just to financial services, are you?

SPEAKER_00 9:10

No, that's right. So we do keep a broad range. I think we're about 60% financial services. Uh, we we have some great, great clients outside of financial services as well. So, um, but Barclay Homes, for example, um, we work with we work with a couple of different utility companies. So it's really good to keep a broad range of uh the companies that we work with, and of course, they bring perspectives and solutions and ideas to the other work that we do do in financial services that really just broadens the broadens the horizon of what we're able to work on.

SPEAKER_01 9:39

And and one of the things you can obviously do, you talk about kind of your 360 framework, you you can align that then, I guess, to to regulation. And that's what we'll talk about here is is the consumer duty that's it's landed firmly on the desks of the head of CX in all financial services companies. Well, in fairness, it landed there some time ago. Whether they've got to it yet or not, I don't know. But um uh obviously you've been able to shape your proposition to support organizations to understand just how well are we serving our customers against the principles in consumer duty. And then I I I guess give them a roadmap of kind of you know where they need to get to to be on the right side of the regulation. How's that going?

SPEAKER_00 10:20

Yeah, it's going well. I think uh I I think that you are potentially um overestimating a few organizations actually the guidance landed um in compliance, really, in 99% of cases. So it's it's the head, it's the director, it's the chief of compliance and/or risk who are picking up immediate responsibility for consumer duty. Those organizations are a little bit further down the line in developing their understanding around the regulation, and that it is actually something that spans across the whole organization are the ones that are either beginning to push ownership out slightly more widely, um, and are the ones that are really beginning to understand the regulation, but uh ultimately the best approach is is going to be a cross-functional working group of all of the parts of an organization that do that do interact with with the customer. Just to go back to talk about our solutions that we're offering. So, as you said, our traditional 360 assessment is one whereby we've taken that assessment and we've uh realigned the questions within it. So we have now um mapped them versus the four outcomes of consumer duty. So people are able to do the traditional assessment, which as we've already discussed, results in the gold, silver, bronze award, but also they're able to begin to get a view as to how well they're performing against their consumer duty um obligations, and obviously that's through um surveys that are done with the end customer and then with the employees of the organization uh internally. So that that that's just I suppose what one of the um types of engagements that we're able to have with organizations, but that that realignment of what we've done traditionally to map to consumer duty has been quite successful.

SPEAKER_01 11:56

That's great. And and I think it's fair what you say there. I I spoke at um uh an event, financial services forum event, um last year. And then in the discussions with people afterwards, what became very clear was that for a few, and I'll say it's a few, a handful, this was a great opportunity to kind of reassess, make sure that we're fit for purpose, see what more we can do. And for others, it was a it was a mild irritation, it was uh a necessity to just go through and and tick boxes and demonstrate what they were doing. That was then, that was a few months ago, and I know kind of you know there's been quite a healthy attitude shift, but I guess it is, you know, with any regulation comes in, it's polarized, in it, especially when it comes to the customer. If it's aligned to what your customer strategy is, great, if it kind of is conflict with your customer strategy, it's going to be more challenging to put through the organization because it's gonna require the change management as opposed to just yes, this is what we do already, let's just demonstrate that we're doing this effectively.

SPEAKER_00 12:56

Yeah, indeed. And I think that there are a lot of organisations whereby the regulation is actually in some ways in direct conflict with their strategy as an organization. So I met a few firms I can think of that I've I've worked at or worked with, it is it is their strategy to deliberately exclude certain types of customers. It's going to be incredibly important to be able to document why that is happening and why that's taking place, and that that is a just exclusion for those organizations to be making. So it really is the measurement and the evidencing that firms are going to need to get a really clear handle on. In terms of the firms that we're interacting with and that we're uh seeing are gaining most value from consumer duty, it's really for me the smaller to medium-sized firms who have a really good, in most cases, one-to-one relationships with their end customers. And actually, these are firms that already know intuitively that they're delivering a brilliant customer experience. But because of consumer duty, they're actually being forced to begin to evidence that experience that they're offering through the four outcomes, through whether it's NPS surveying, direct questions against the four outcomes, verbatims, etc., all mapped against their customer journeys. But for these organizations, I think they're beginning to see a commercial opportunity off the back of consumer duty. So they've always known they had great relationships now that they're actually able to begin to evidence those, um, that is providing them with insight to begin to improve the experience that hadn't really been able to gather before just because they didn't have the mechanisms in place. So I think it started off in some of these organizations as a bit of a tick box, and as they begin to see um the outputs that you can get when you do begin to survey your customers, uh, it is something that's going to be able to help them commercially. I think one compliance officer we spoke to said um said that he should begun to consult his customers more quickly than he has done. And this is from a compliance officer, that's not necessarily a type of thing that you would expect them to say. They're not always the closest to the to the customers and to the customer needs. So, yeah, I don't think anyone ever gathers customer insight and says, Oh, we should be waited before doing this.

SPEAKER_01 14:55

I I mean that that is, I'm sure when the FCA drew this up, they didn't look at that as a byproduct that would come out, but invariably it will is you'll have people who are less connected to the customer or less inclined to take the customer's perspective, realizing how it's a great enabler for what they want to achieve. There's a couple of things you say there, which for me are alarm bells, but I think I'd like to discuss this point about the how healthy is it to be regulated in terms of your customer experience. But you know, you mentioned there around you compliance officers all of a sudden seeing the value of getting to the customers and listening to them. You know, for me, that's hang on a second. If you've got an operating model in place, a customer-centric operating model, that's something you've always been doing anyway. And hang on a second, you're talking about going back to customers. Well, again, that recognition piece is something you'd always would have been doing anyway. So if this piece of legislation is forcing people to put those things in place, so actually now you've got to document the experience, understand the outcome. Well, it's actually just tidying up the framework that should have been in place already. And this comes on to my my second point, which is, and I've worked in utilities, I've worked in financial services, I've worked in automotive, where perhaps the manufacturers dictate what can be done. It's a real challenge, isn't it? When you when you are you are restricted or constrained, maybe some would say it's a healthy sort of handrail for you, but when you're pushing a particular direction with your customer experience, it one means that those involved in actually delivering it are doing it to make sure they're the right side of the regulator. And and secondly, some of the time that you could be expending, being curious, exploring, and experimenting is gone because it's beyond what's expected of you. And you've worked in financial services, you work with a side outside of what's your view? I mean, is a is legislation and regulation on behalf of the customer, is it all in all a good thing? Or you know, what's your what's your take on it?

SPEAKER_00 16:51

I I think it is definitely a good thing. I think that when you articulate customer experience being um regulated by the FCA, I think in many ways it already has been over the last decade or so. So when you think about conduct or treating customers fairly or complaints, for example, you know, these are all uh things that have existed through the FCA that ultimately firms have had to um adhere to over time. So I do I do think that this is just a step forward from that perspective. So, you know, treating customers fairly, vulnerability regulations, um, consumer duty, I do think that overall they are things that will have without question lifted the amount of uh care and attention that uh customers are being offered by financial services. And I think while it would be brilliant for every experience and every person within every financial service to be all consumed by delivering the right outcome for the customers and for that for the experiences always to be brilliant ones. Unfortunately, that won't always be the case. You ask the CEO of an organization what the most important thing is, and he'll tell you customer. But if you sit in a monthly exco with them, that won't be what they're actually talking about. It will be uh they'll be talking about the results of the organisation. So that there is this ever-lasting balance within financial services that have to be achieved. And I think that it is unfortunate that in a lot of instances it's the regulator that means it has to be um that way. Nonetheless, I think if the regulator wasn't there, I think practices would probably be a lot more cynical than they are now in many instances.

SPEAKER_01 18:20

Yeah, yeah, no, I'm I'm with you on that. I think it's a it's a force for good, it's a necessary requirement. And I'm sure there are many organizations where you have these enlightened leaders. I mean, some of them, the newer banks, you know, kind of you've seen they've spent a lifetime working with within the banking constraints and kind of realize how they can burst through of it. Um, in in your evidence of what you've seen so far, is there any organizations? You don't have to name them, but it's good to kind of get a sense of you know, enlightened leaders out there who are who are kind of you know crashing through the finishing line of the the four principles and then going further.

SPEAKER_00 18:57

Yeah, I think you've mentioned the forward-thinking organizations will be the ones that will be able to embrace consumer duty quite quickly and ultimately uh their adherence to it isn't going to be a mistake. They would adhere to any customer experience framework that you know in imply or force firms to begin to consider their customer experience across the board. So, in terms of the firms we work with, um, I would say the most obvious one would be Tandem Bank. Uh so they're very much on a mission around green banking. Um, and one of the main concerns of consumer duty, or one of the main um worries articulated by the regulator has been um around there being the potential for experiences to be much worse for customers once they were on board. So financial services deliver a great experience up to the point where they've got your money, you're on board, they don't need to worry about you anymore. What we actually found with the work we did with Tandem Bank was that their customers that have been with them for a long time actually enjoyed a better experience than those who had just joined the organisation. Both sets of experiences were really good, but to see a bank whose customers, whose long-term customers are having a better experience and had a higher view of the organisation than those that just joined was really good to see. I think it's also worth mentioning that a few organisations we've spoken to who are either bringing new propositions to market that are going to need FCA regulation or are indeed new organisations entirely who are seeking regulatory approval work for the organisation and for their proposition as a whole. Those organisations are having to speak to the FCA about consumer duty now. So there's a little bit of a rhetoric potentially around the regulator, maybe won't really be taking this quite that seriously when it actually comes to the um kind of management of uh the regulations on a day-to-day basis in terms of their interactions with firms. But those two examples have certainly seen a very proactive FCA so far, as far as I can tell. But again, it is those firms that are putting together the more customer-led um service or product propositions that are going to probably breeze through um the approval when the ones that aren't probably will find it a lot more difficult.

SPEAKER_01 21:09

It's remind me I go back to my advertising days and working with a large uh international payments company. And they said their retention team said it's only a matter of time before we let them down. You know, kind of it was almost like an acceptance that we work very hard on the acceptance and the onboarding, but actually over time it becomes very difficult. So it's really good to kind of hear organizations saying, actually, we focus on on the relationship. And maybe this is a point I know you and I have discussed before. In in financial services, is it would it be fair to say that actually the experience is more around the transaction, you know, just by the nature of the business, it's around the transaction. If I book a hotel, then actually it's less about the transaction and it's more about the after sales, the service, and the experience I have when I use the products. So financial services companies is a very different dynamic when it comes to customers. Some experience in the first place.

SPEAKER_00 22:01

Yeah, yeah, indeed. I suppose with every product or service lifecycle, there are the stages that exist, you know, the five or six well-defined stages. And I think that it's really easy to measure consumer duty based on those particular stages. You know, every customer will go through those. But when it comes to financial services, I think a mistake that's often made by customer experience professionals, people within the organizations that are looking to improve their customer experience. The mistake they make is that they believe their customers want a really close day-to-day relationship with their service provider. Many, many customers for many organizations really just want the organization to do the job that they've employed them to do. So a pensions provider, provide me with my money every month. I don't need to hear from you and any other way, other than that. That's what I've asked you to do for me. Just please keep it simple, get it right, don't mess things up. So there are these really simple parts of the journey. So, you know, the drawdown for the SIP provider, the renewal for the insurance provider. There are defined journeys that every customer will have to go through and get those right and just think about the transaction rather than the actual day-to-day experience that someone has with an organization. And I think that organizations would be in a much better space if they focus on the build key moments that matter per their product or per their industry.

SPEAKER_01 23:20

Yeah, I think that's a very good point, is when you think about your relationship with your financial services providers, and I think about other things like my relationship with the storage company I'm using at the moment because we're having some work done. It's a very small transaction in comparison, but actually it's a it's a very different nature of relationship, and therefore I'm much more invested in it. Versus my annual travel insurance and my annual um car hire indemnity insurance has just come up, and they've breezed through my inbox and outbox in in a matter of seconds. And I'm very happy with that. That's all I needed. You know, there was enough in there to show you've still got the right level. Here's a competitive quote. Should you need us? Hopefully you won't, with there in the background. I think if they'd have labored that, it would have got to the point where I'm going, this is no longer an experience I value, but I'm guessing it's something either you're obliged to do or you think this is what good looks like. And it's and it's understanding the context of those relationships, isn't it? But I mean, coming on to those vulnerable customers, obviously there are some customers, um, and it might be worth just defining, James, because this is a category which, having worked in energy, it can be quite a broad people can drop in and drop out of vulnerability just based on the fact they've broken their leg and they're immobile. So in financial services, the category of vulnerable, who fits into that category?

SPEAKER_00 24:36

Well, again, I think you've defined it relatively well there. I think anyone and everyone can fit into the category of being vulnerable, depending upon their particular life circumstances. Obviously, there are people that are dealing with their lives in very different ways, but yeah, people are often subject to very changing circumstances. So myself, I was without doubt a vulnerable customer at a point in time. After my sister died, my wife and I had to cancel our wedding, our wedding insurance wouldn't pay out, they would barely interact with us. When I actually look back, I was clearly a vulnerable customer at that point in time. And unfortunately, the organisation just didn't quite view me as at that point in time. I think, in terms of the work we've done more recently around consumer duty, I think we've definitely found that the amount of people who are identifying themselves as vulnerable is still extremely low. And I think probably more needs to be done around the communication, the terminology used around that, and just ensuring that people outside of financial services and I suppose the utility sectors as well have a good understanding of what vulnerability means. And it isn't something that in any way needs to be a negative connotation of a customer, it's merely a customer that at that moment in time would need a slightly different level of service to what is typically offered. So I think that really that's that's the that's the work that needs to happen within financial services. Um, and yeah, I think as well, you know, it is the type of thing whereby uh contribution really is something that's forcing organizations probably to take the level of care that they've been dedicating to vulnerable customers when they've been getting it right, and saying that if a vulnerable customer is going to get this, then it's probably something that should be available for all customers because they can slip in and out of vulnerability. So, really, the challenge there for me becomes servicing vulnerable customers in a financial service in the last few years has been possible because they are the cases that are not typical. So you can step outside of procedures, you can begin to spend a little bit more on potentially that solution for that customer. But if those are going to be things that are now going to need to be widespread across the organisation for all different types of, you know, potentially hundreds or thousands of customer interactions, then that's going to be a very hard solution to deliver for the organisation. So there's going to be some serious thought that needs to be given to the automation of those types of solutions or the cost effectiveness of what they are. And hopefully that doesn't result in a degradation for the services that vulnerable customers have come to need and have had identified by certain firms.

SPEAKER_01 27:04

You've highlighted there very well a very complex situation because you said earlier, you know, this idea of inclusivity, but actually are some organizations, should they be saying we simply do not have the capability or the capacity to effectively manage that vulnerable relationship. We could only do it in a highly automated world, which we know is not the relationship that some vulnerable customers would need to have. There's a good example in um the Netherlands of Jumbo supermarket, you may have seen it, where they've introduced a slow lane where you stop, you chat, there is no getting through there quick. And they've identified that it's probably the only one of the most important quality conversations seniors who are on their own will have during the day. Now, you put that in front of your financial director, and they're going to be saying the square footage of this premises means we cannot afford to do that. So it does mean breaking the rules of business conduct. And unless, I guess it's a mandated you have to provide X percentage of your base with this, X percentage of your base must be vulnerable and that they must therefore be catered for. Then as a financial services company, you're going to say, Are we best placed to serve these people? So I think it's yeah, it's a challenge, isn't it? Because as we we race towards digitization for good reason in some cases, because of the point we said around keep the friction low, it's just I'm in and out. If you're doing that for all your base, but then you're having to provide a more in-tou, more engaged solution for some of your base. You then take a step back and look at the profitability, and you've got to say to those other customer types, we need to punish you in order to support the other customers, which I guess as a shareholder, you might look at and say, I don't understand how this is working, or an FD, you'd look at it, I don't understand how it's working. Very complex, not just easy to say, always do the right thing for that customer type, because it will mean other customers potentially will suffer. I mean, is that am I am I overplaying it or is it that complicated?

SPEAKER_00 29:01

No, I don't think so. Uh so a good example is uh offering of channels that organizations have to deliver for their customers. So, really, if you're to read through the consumer duty regulations closely, effectively what it's saying is that organizations need to be able to offer whatever channel is most suitable for any particular customer. So, effectively, if you have more than a few hundred customers, then you're going to be at the full range of channels that you are going to have to begin to offer. Now, you know, I think back to what you and I did together as well as many other projects I've worked on, that those in many instances are around directing customers to either self-serve, so you're effectively directing them to a channel where they aren't actually having to communicate directly with the organization or to a channel that is much lighter touch, less expensive to service, such as live chat, for example. But there'll be a lot of customers that if their desire is actually to talk to someone onto the phone on the phone or to see someone face to face, then organizations that arguably are going to have to consider opening those channels back up again. Now, how that aligns commercially. Again, you talk about the CFO. I can't imagine they're going to be particularly happy at that as a particular project that they're going to have to work on when it comes to reopening those more expensive high-touch channels.

SPEAKER_01 30:15

Yeah, absolutely. And I think if I take my situation, I wonder also what it means in terms of knock-on effect to other groups of customers. So I had a car accident back in October time. The way the car repairer managed it was just awful, woeful, really, really poor. And I was quite vocal about it at the time. I then referred it on to my insurance company, um, who three months later have not been able to answer my query. They said, we're looking into it, we'll get to you. And then I thought, well, I'll go to the ombudsman who says, due to capacity issues, it's a minimum of two months before we can come. So it's going to be five months minimum for me to actually play back that the basically some training is needed down at this dealership to make sure other customers don't have those problems as well. Now, we only know a very small context of what's going on in people's lives. How do I know that that organization hasn't had to prioritize a particular segment of customers? And it's not the fact that they're just not getting around to doing it, it's the fact that all of these others have to be dealt with first because it's been the way it's been prioritized. So I, as a customer, perhaps arguably having had an accident, not a profitable customer, may decide to leave and go somewhere else because they were serving that group of customers well. So I think it's it is a real challenge when organizations have to respond and never look at these things and say, oh, it's easy. The easy answer is just look after everyone because it's a lot more challenging than that. And I think that's probably another point. And I wonder how well this is formulated in consumer duty. It is around that management of expectation of customers. Do you feel that consumer duty is hitting this one? And you may not be able to resolve it, but it's about engagement and keeping people aware of why you're not delivering as well as you are delivering.

SPEAKER_00 32:04

Yeah, I think it will completely change a lot of business practices. So, a really good example that brings this to life is uh a stock broker that we're working with. So they're a relatively small, yet very profitable stockbroker, a lovely business, you know, just the type of business that you want to be involved in or want to be a customer of. Again, always delivered a great experience, and they haven't needed to worry about consumer duty or about evidencing their customer experience up until now. In regards to their business model, they essentially grow through when their high net worth customers die and divide up their properties at a complete estate between their children, I assume, or other individuals that they're leaving this money and property or other valuables to. What happens then is that you could get, let's say, one out of those three people who are inheriting something that were in no way suitable as a customer for this stockbroker. So they don't have particularly high financial literacy. They aren't a customer that would typically get through an approval stage for this organization. So what they need to be able to do now, what they need to be able to focus on and develop hugely their practices and their disciplines around is how to speak to customers and to begin to reject them ultimately and say you may have this new profound wealth within your life, but actually you're not quite suitable for us. Here are the places to go, here's a person to speak to, and they need to be able to document why they're having those conversations from a strategic level, but they also need to be able to actually have those skillful conversations themselves and ensure that the customers are feeling abandoned or feeling like, well, my mother used you, my father used you, why on earth wouldn't I be able to use you? And just to be able to develop those skills isn't going to be a huge challenge for organizations.

SPEAKER_01 33:45

Yeah, and it's very true. I mean, it's the sort of thing you do want, isn't it? If you go into a shop and they haven't got what you want, what you really want is there's someone in the shop to say, Well, actually, three doors down, they've got something very similar that'll be more appropriate for your tastes. And you want that rather than sorry, we can't help you. But if actually you're forced to document why you can't help and why you've referred everywhere else, then it does require a mindset to say that actually the the worth of the relationship with the person who's passed away is not does not end when they pass away. It goes beyond that, even if there is no business, we have to kind of rethink that. And I think that's one of the big challenges financial services. When you when you hover around the city and you see how bonuses and incentives are worked out, it is a very short-term transactional world in which it lives. So invariably, that must be difficult to permeate all the way through an organization to say think long term.

SPEAKER_00 34:40

Yeah, and certainly for the sales function. So if you think about, you talk about observing what goes on in the city, relatively ambitious and um aggressive, but sales forces who are ultimately going out and trying to win business so that their competitors don't win it. If we're saying that they have to be able to document interactions with every single customer, exactly why they've chosen to not take forward an interaction with a particular customer and to have a valid basis for why that the products of that or services of that company weren't right for them, then that's going to add a huge amount of work to the sales force. And also it doesn't really fall in line with the nature of someone who is in sales to begin to really worry about someone who's not going to be going through the pipes of the organization. So again, it's another example of where practices will be really hard to change to fall in line with the consumer duty regulation. That said, why shouldn't a customer have it well explained to them why something isn't suitable for them? Why shouldn't they know where to go next? As you say, a rising tide lifts all ships need to be in the position where an organization or organizations are acting empathetically, not only to their essential or existing customers, but also to other organizations around them. If there's a better product for someone, then you should know where they can go to go and get that product.

SPEAKER_01 35:52

And you could argue then invariably you need to get to a point where your positioning in to the customer is very clear. So you don't have that conversation in the first place because I'll look at certain banks and no, they're not for me because of the way they position themselves, maybe across the high street and some of the insurance providers, it's not so clear because they're still trying to catch as many customers as they can. James, that that that's brilliant. I'd like to come on to just obviously seeing what you've been posting on on LinkedIn and other um platforms about this. There is an approach that could be taken, and I did see a presentation by one organization, which was you could see them rubbing their hands with consumer duty being there. But I have to say, that's certainly not the case of what I've seen from yourself and a couple of others as well. Uh chat with Sean Cremins from Insight Six, where what you've chosen to do is to help educate, inform, and make available basically any news and knowledge that's out there, webinars, even from organizations maybe doing things that are the same as you, you're actually out there helping as many people in financial services really get their head around this topic as possible. For us, Lexton, that's one of the customer-centric mindset traits is sharing everything in the spirit of progress. Is that been a deliberate strategy to make sure that you help educate rather than kind of, you know, look for commercial opportunities out of this?

SPEAKER_00 37:09

Yeah, absolutely. So I think it's an approach I probably observed when you and I work together in terms of what Lexon does as an organization. It's definitely a forward way of thinking. In reality, that there are 50 odd thousand regulated firms. And if an organization has a particular proposition to those, there's certainly enough customers for everyone to go after and for everyone to be able to progress their own businesses. So, yeah, for me, it's definitely a place where best practice should be shared, and every organization should be looking out for other organizations, just as organisations in the financial services should be looking out for other organizations within the financial services. So it's definitely been a deliberate thing that we've done. From my perspective, that's just generally my approach. I've worked at three or four organizations now where I've had some form of regulatory responsibility. Certainly, for me, the objective when in those roles is that the customers get the right outcome. The objective is not that the organization adheres to the regulation, because they will adhere to the regulation if you are delivering the right outcome. So focus on the outcome and then whatever happens will just follow. So to an extent, I think you can be agnostic around the organization or you know, around the product, really it's about getting the customer the better outcome.

SPEAKER_01 38:20

Excellent. Well, I think that's a really healthy place to finish then, because obviously, if I am in this space, either if I'm interested in consumer duty and I maybe I'm a voice of the customer provider, and as you can say, you know, some of these tech providers need to, they're part of the supply chain, they're going to become accountable, they need to understand what their obligations are. Um, or if I'm a financial services company and I'm thinking I wouldn't mind to get another angle on it, you seem to be the man to go to for consumer duty. So if people want to reach you, James, what's the best way they can get hold of you?

SPEAKER_00 38:49

Indeed, yeah, absolutely. So you'll be able to find us on our website. You'll be able to see a lot of consumer duty information there as well. So that's investorincustomers.com. Uh, and then obviously myself, very active, as you've said, on LinkedIn. So you'll be able to find me there in our organization and also via the regular channels. My email address will be on our website.

SPEAKER_01 39:07

Great. And can I ask, are you intending to publish any white papers or anything when this is over? Uh and just a reflection of how organizations managed and uh performed through this?

SPEAKER_00 39:18

Yeah, absolutely. So we're working on a couple of consumer duty guides based around what our proposition has become to be as we've learned more about consumer duty. We will be doing a white paper soon as well. We're getting enough of our studies and engagements over the line, and then at that point, when we've got enough data to begin to put together the white paper, we'll be working on that. So, yeah, watch this space.

SPEAKER_01 39:37

Right. Is there anywhere at the moment, or is it something you've got ambition for to there's going to be capturing some of the better practices out there? So that again, this whole idea of the customer outcomes are what we're working towards. And regardless of which brand I choose, you'd all you'd hope that any customer has a better outcome. Is there a place or is there potential a place where you know people can go to and get case studies on what's been done, or is it a bit too early yet to see that sort of stuff out there?

SPEAKER_00 40:03

Yeah, it's definitely early. The website is always full of our case studies, and those on the consumer duty front will begin to build up over time. So, yeah, again, watch this space and as consumer duty develops, as we get more studied over the line, um we'll we'll be able to show those in terms of the best customer outcomes. I think first and foremost, it'd be helpful if the FCA defined what customer outcome was. Uh, but yeah, I think we'll be at a point soon where we've spoken to enough organizations to have a really great set of examples of how you can deal with customers in certain situations. The stockbroker being a good example, they won't be the only organization that are now having to deal with an increased amount of customers that are having to, I suppose, deny services to for all the right reasons. So I think once we're at the point where we have enough um information around those, I think we'll be able to begin to share some best practice around that type of instance.

SPEAKER_01 40:51

Brilliant. James, well look, thanks ever so much for spending time with us. Good luck with uh the organizations that you're supporting. And as a customer of many uh financial services companies, um, I guess I I will just hopefully have a better outcome. This isn't something as a consumer, we're necessarily going to see the kind of over impact on. It's only going to be delivered in in the way our experiences improve, I guess, isn't it?

SPEAKER_00 41:17

Yeah, I again I think that's probably still yet to be discovered, really. Right. Martin Lewis, for example, has now made a couple of comments around consumer duty, whether or not it's something that end customers do begin to grasp and to understand that financial services have a new, larger uh set of legislation they need that they need to adhere to. It's still a little bit nebulous as to what is going to actually happen. There's been some talk, so my local MP was talking about this potentially being another misselling type scenario whereby firms can be held to account through thousands of groups of customers that have gone through a similar experience. So again, it's all relatively unclear at the moment. And I think it'll be probably a more suspect on exactly where that might end up.

SPEAKER_01 42:00

Okay, great. Interesting. And yeah, no one wants to um uh hear that miss selling word, do they? Especially when you're working to try and make things better and bring things to the surface. You want to create that trust and those connections with the customers rather than transactions. Well, wishing you all the best with it. It's great to catch up with you again and uh maybe we'll have you back at some point just to hear what the great practice uh looks like once we're the other side of this. Excellent.

SPEAKER_00 42:26

Sounds good.

SPEAKER_01 42:27

Thanks, James. Bye bye.