Skip to Content

Navigating Consumer Duty

Do you speak finance?

As part of our Consumer Duty series, we’ve launched new research that measures how well communication around financial services is being understood by consumers. We uncover how understanding can vary by demographical groups and whether this understanding is being effectively translated into practical knowledge.

Kathy Ellison Director 17/03/2023
It’s clear from our study that there is a need to improve clarity and understanding, particularly with individual audiences (such as younger consumers).

A requirement of the new Consumer Duty regulations is to demonstrate that customers understand the communications they receive from their financial providers – and to provide a fix if there’s uncertainty or ambiguity in the messaging. But what is the current state of play? Do customers understand the communication they’re being given or is there an underlying problem that needs to be fixed?

We conducted research with consumers who have bought a new financial product or renewed one in the last six months. We found that seven in 10 consumers felt it was easy to understand the product from the communications they received, and one in three find it ‘very easy’.

Less than one in 10 (8%) find it difficult and two in 10 say it varies.

This is generally great news!

How does understanding vary across demographics?

However, pockets of the population are more likely to find financial services communication difficult to understand– one in seven (14%) Gen Zs (those aged 16-26) and one in six of those with some form of vulnerability (such as a recent life event or a capability issue) find it difficult to understand.

Interestingly, there is no stark difference by gender, with women and men just as likely to find comms difficult or easy to understand. The same goes for social grade.

New business documents vs. ongoing customer communications

For consumers who have not bought a product recently, the picture is less positive.

In this case, 6 in 10 felt ongoing customer communications are easy to understand with only one in five finding them very easy.

However, again less than one in 10 (7%) found them difficult and a quarter said it varies. Again younger consumers are more likely to find comms harder to understand and this time women more so than men.

Does this imply that sales documents are better at explaining things than the generic comms from providers?

Does understanding mean consumers know what to do next?

Whilst most consumers understand the communications they receive from their financial providers, the big question is: do they know what they need to do?

Among consumers who had bought a new financial product or renewed one in the last six months, one in four (25%) are not clear, at least in part, about the next steps or actions that they need to take, and this is notably higher for younger consumers; with one in three of those aged under-40 agreeing.

But for ongoing comms in general, nearly one in three  (31%) are not clear, at least in part, about the next steps or actions they need to take and again this is significantly higher with younger consumers, with half (49%) of Gen Zs feeling unsure.

Admittedly, less than half (48%) of consumers surveyed say they read the communications they get in full. But, those who do, are far more likely to say they know what actions they need to take next.

What does this mean for the industry?

It will be interesting to see how the new Consumer Duty regulations will improve consumer perception and maybe even their willingness to read more in full over the next few months (and indeed years).

It’s clear from our study that there is a need to improve clarity and understanding, particularly with individual audiences (such as younger consumers) and those who’ve not purchased a product recently.

This will lead to (we hope) reduced cases of missing critical actions and potential financial harm.

For further information and insights on navigating financial communications, please get in touch.

Navigating Consumer Duty: a Savanta series

Our new series aims to help financial services professionals prepare for the updated FCA regulations coming into effect this year, providing guidance and advice to help businesses plan, test and evidence compliance, to meet the new requirements.

To access more articles from the series, click the links below, or get in touch with one of our financial services researchers if you’d like to talk more about this topic.

Getting prepared for Consumer Duty

We offer two solutions that will help you plan and prepare for the new regulations coming into effect on 31st July 2023. Whether you require comprehensive communications testing, or an off-the-shelf solution that enables communications testing at scale – we have you covered. Download our spec sheets to find out more about our new offers.

Download the Consumer Duty Communications Testing Framework by completing the below form:


Knowledge centre

Read More
Explore