Consumer Duty awareness rises among customers but ‘significant issues’ remain

Awareness of the Consumer Duty has risen among UK adults in the past year, new research has found.

Overall, 59% of those surveyed said they are familiar with the regulation now, a noticeable increase from 34% last July, just before the rules were implemented.

This is according to a study by Edelman Smithfield, the financial communications arm of PR company Edelman.

Awareness is high among the younger age groups. with 64% of 18–24-year-olds, 69% of 25–34-year-olds and 61% of 35–44-year-olds all saying they know what the Duty is.

Additionally, two-thirds of 18-24- and 25–34-year-olds said they hold financial providers to a higher standard since the Duty’s introduction.

The research shows that, in general, people have noticed improvements since it was implemented.

This is especially true in the fields of communication and customer service, with 38% and 37% saying they have noticed improvements, respectively.

However, despite these developments, significant problems do remain.

Overall, more than a third of respondents (36%) said they feel “financial services companies tend not to care about their customers, they just want to make money”.

This was the second most frequently cited reason given as to why financial services companies have poor reputations.

Over one fifth (21%) said that providers do not appreciate loyal/existing customers, while 20% said that their customer service is poor.

Almost two thirds (65%) of UK adults believed there is enough competition between financial services providers in the market.

However, three quarters feel the government should do more to ensure financial services companies demonstrate more value and provide better deals.

The vast majority (80%) expect financial regulators to do more to push companies to do better by their customers.

Negative perceptions of financial services across the UK mainly comes from poor price transparency, lack of customer care and concerns about losing money.

Over a third (36%) of people said that “their [financial services companies] pricing is often not transparent, so it’s hard to know whether what you’re getting is worth it”.

A further 29% find it difficult to choose a provider “because they seem expensive for what they offer”, and 28% think they make too much money.

The Edelman’s 2024 Trust Barometer found that the financial services sector is distrusted in Europe’s five largest economies (Germany, UK, France, Italy and Spain) and only neutrally trusted in the US.

Edelman Smithfield senior director Aidan Holloway said: “Our research suggests that distrust of financial businesses in the UK is entrenched.

“The industry’s perception problem cannot be considered just a legacy of the global financial crisis.

“A lot of the negativity is about perceived profiteering from recent macroeconomic events that has seen prices soar.

“It is also about wariness over the rapid digitisation of financial services, which is driving distrust, and the feeling that they are being taken for granted by large providers and are benefitting from their loyalty whilst giving little in return.

“We can see a more determined, even activist, consumer response to these perceived issues in the form of a strong appetite for further regulatory intervention and the use of the Consumer Duty to hold providers to account.

“The exceptionally high levels of awareness of the FCA’s Consumer Duty, especially amongst the younger cohorts, indicates a direction of travel.

“Customer service, user experience, high value products and great communications are key to changing perceptions and assuaging a customer base expecting higher standards from providers.

“For those financial providers that get this right, the rewards are formidable. For those that get it wrong, the penalties could be severe.”

To obtain these results Edelman Smithfield commissioned Censuswide to poll 2,021 UK adults in June 2024.