Whitepaper outlines six digital tools to help providers meet FCA Consumer Duty

Six digital tools to help providers meet their Consumer Duty requirements have been outlined in a report from Dunstan Thomas, including a potential value for money assessment tool.

The white paper, which was published in response to the Financial Conduct Authority’s (FCA) final rules and guidance for the Consumer Duty, highlighted both the threats and opportunities the duty’s regulation poses for pension both product providers and adviser platforms.

The paper stated that there are four key areas in which the Consumer Duty is attempting to improve outcomes and, therefore, four areas in which providers will need to focus on: consumer understanding, products and services, consumer report, and price and value.

Dunstan Thomas explained that these key areas would demand more of pension providers, asking them to ensure consumers have the key product information, such as its important features, or offer customer products to meet their needs, rather than pushing products that aren’t suitable or necessary among others.

In particular, the pensions technology company detailed six different digital tool that it could build for providers that, it believed, would help them meet Consumer Duty requirements.

This included a consumer duty outcome dashboard, which could show the new customers that have been onboarded over a selected period, and a financial health dashboard, which would feature facilities for open finance plug-ins to enable a holistic view of savings.

The tools also included a personalising value for money tool, which could allow for the customer rating of pension providers, and a value for money comparison tool and would allow comparison of the customer ratings in the previous tool.

A retirement income explorer tool, which would allow the exploration of financial goals through calculation-based tools, was also included in Dunstan Thomas’s report, as was a pension value for money assessment tool that would pull in key values that contribute towards optimising a customer’s retirement income, such as investment growth.

Dunstan Thomas director of retirement strategy, Adrian Boulding, commented: “Many of the e-commerce ‘nudge’ tools which were developed to optimise sales on consumer product websites can now be adapted by financial product providers to meet duty requirements.

“For example, what about adapting an ‘abandoned cart’ tool to reconnect with customers that are over 60 and have explored your decumulation options pathways, made some selections in one of your planning tools but then abandoned the session?

“An opportunity could be created to provide feedback on why they decided to take no action - uncovering whether they have a good understanding of their options, have recognised they have a savings shortfall or some other dependency which has led to the customer getting stuck.”

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