7 Simple Steps to a Fool-proof Consumer Duty Data Strategy

With Consumer Duty only 6 months away, you should have your implementation plan in place and be starting to work towards making it a reality. At Change Squared, we talk to lots of advisers and the stark reality is that whist most (but not all) firms have an implementation plan in place, it’s pretty high level. And without exception, the woolliest bit is almost always their data strategy.

“We’re going to collect insightful data, review it regularly and use it to make decisions that bring about great consumer outcomes”

That’s great but how? The above statement sounds great but there are big questions around what will practically happen to make it a reality.

Consumer Duty requires data to function and whilst all firms will collect some data now, in 99% of cases, it won’t be anywhere enough to satisfy the Consumer Duty requirements. In their recent review of Implementation Plans, data was highlighted as one of the areas firms should focus on with the FCA stating “If firms assume they can ‘get by’ largely with repackaging or supplementing existing data, then they risk not thinking deeply or afresh about the types and granularity of data that they will actually need to monitor and evidence outcomes under the Duty effectively.”

With data the biggest question for most firms, here are the 7 steps to creating a fool proof Consumer Duty data strategy.

1. What data do you need to collect?

First things first, you’re going to have to decide what data points you’ll need to collect so that you can prove that you’re “acting to deliver good outcomes for retail consumers”.

Helpfully, or infuriatingly, depending on how you look at things, the FCA have left it entirely to your discretion what data you want to collect to prove this. This could be from any, or all, of your processes such as onboarding, annual reviews, rebalancing, ad-hoc interactions, off-boarding, etc. Due to the wide-reaching nature of Consumer Duty, it has to be principals based as it equally applies to a one-man IFA business as it does a multinational bank.

You’ll no doubt already be collecting some data like persistency, complaints, etc, however Consumer Duty is going to require more.

Much more!

In our view much of Consumer Duty is subjective, so the only real way to really find out if your work is delivering good outcomes is to ask your clients. It would be impossible for me to look at some data about persistency or open rates and from that decide that you feel that you’ve received value for money. Value is personal so you’ve got to ask the person.

Whilst you may decide to have other measures based on the client’s cash flow model, value assessment from the CIP or other processes, we recommend that a good client feedback system is key every successful Consumer Duty data strategy.

When deciding what data to collect, you should also think about what you’ll deem “acceptable parameters” from the data. Let’s say that on average you get a 20% response rate from surveys and, on average, 80% of your clients say your communications “couldn’t be clearer”. That is a pretty great score so there’s probably no need to beat yourself up if your response rate drops to 19% for a month, or your communications response comes in at 75% from the next 10 surveys.

If, however, the response rate drops to 5%, the communications score decreases to 10% from the next 10 surveys, or there’s a decreasing trend month on month, you’re going to need to find out why and most probably act pretty quickly. Think about your acceptable parameters now, document them and build them into your Consumer Duty data strategy. They may change over time, but it’s much easier to start with some measures in place than to “see how it goes”.

2. How best to collect that data?

Now you’ve decided on what data you’re going to collect; the next step is how to collect it.

If you’re going to ask your customers for data, surveys sent via email will probably give the most honest feedback. Consumer Duty has killed the customer satisfaction survey; what you need to know is if the client feels that they have achieved a positive outcome, got value for money, were able to access their products and services as reasonably expected and found your communications clear and timely. In short, this is a totally different type of survey!

There are some great tools out there that already to do this (we like Elevation from VouchedFor) but if you are going to create your own, be very mindful of the questions you ask and try to centre then around the 4 Consumer Duty outcomes. If you choose surveys, take some time up-front to automate the sending and data collation wherever possible. It will save you an unbelievable amount of time in the long run!

You could also ask your clients a series of questions either over the phone or in person, however, it’s worth bearing in mind that people want to please, so often give what they perceive to be the “right” answer. This means that the questions you ask should stay away from “are you satisfied” because everyone will say yes.

Also, if you (the adviser or admin) verbally ask the question to the client, your unconscious bias will impact the way you ask it (intonation and emphasis on certain words and not others) so whilst this might get you the most positive answers, they might not be how the client is actually feeling. (This is a massive issue when risk profiling, however that’s a subject for another day!)

For any data from your processes or, it’s best to figure out how to make it as easy as possible to collect (preferably completely automated), otherwise you’ll end up spending hours of admin time just collecting data.

Your existing technology providers and product providers may be able to help you with this, so ask. You may be surprised at the amount of support already available so check it out before starting work on anything yourself!

3. Where to store your data?

You’ve collected good quality data that will allow you to assess if you’re enabling good outcomes for clients. The question now is, where do you keep it?

This is one of the big issues facing advisers at present. There is no technology provider offering a central storage facility (at least that we know of) for all of your Consumer Duty data. Most of the adviser technology presently available will be able to store your data, but only for the bits that come from that software.

For the time being then, we see advisers have three options:

  1. Store it at a client level in your back-office system:  the issue with this approach is that the data is going to be challenging to aggregate (look at on a macro scale) as it will be recorded against each client individually.
  2. Create a data warehouse. This is where the data from multiple systems is consolidated in one separate system. Data warehouses (or data lakes) tend to be something for larger firms with developers, however if you’ve got a system like Zoho, it’s relatively simple to set up a data warehouse (less so if you use something like Microsoft Dynamics!)
  3. Use something Microsoft Excel until technology providers catch up. Most people know how to use Microsoft Office applications so this could be a low-tech way to record and store your Consumer Duty data and then use Microsoft Word to report on.

Realistically, it’s not going to be practical to keep data separately in each system. When it comes round to reviews and reporting, this is a recipe for disaster and will eat up way too much time!

4. How frequently will you review your data?

How often are you planning to review the data you collect? We’ve heard a few advisers say annually, which seems OK for a full review, but a long time not to look at any data.

We spoke to the FCA recently and their view was that you should stay away from “random selection” or purely time-based reviews and use a risk-based approach. In Consumer Duty, “risk” means the risk of consumer detriment, so you want to set your review schedule based on how much risk the area poses to your client.

You could have an annual review of all of the way you collect data and look for any trends from the previous year’s data. You could coincide value assessments of products and services with your annual Centralised Investment Proposition review. However, you probably want to have a more frequent review of data from area which you deem to be higher risk (such as Consumer Understanding). Maybe quarterly could be better for higher risk areas? But that’s for you to decide.

We also think it’s essential to build some triggers into your data that prompt instant attention. A PANIC button as it were. As effective as your data reviews are at fixing issues, if you find an issue in February, you don’t want to wait until December to include it in your next scheduled review.

When you define your data, and the tolerances that you’re comfortable with, create a mechanism to immediately flag data points which would cause you concern. As with data collection, this should ideally be automated. Otherwise run the risk of issues sitting on someone’s to-do list whilst they get on with day-to-day work.

If you can’t automate, don’t worry, but do ensure that the person who will find this data understands the importance and urgency of escalating it. We find that creating a process/procedure (and writing it down) helps staff understand exactly what they have to do, and when, and increases the chance of them doing it.

5. What’s method(s) will you use for the review?

You’ve got your data. The next question is what you’re going to do with it to validate that you are acting to delivery good consumer outcomes.

This should be one of the easier parts of your data strategy if you’ve done a good job in defining the data you’re going to collect and the “acceptable parameters”.

We think the review should consist of 6 steps:

  1. Look for trends in the data – are there any general patterns that would lead you to believe things are/aren’t working correctly
  2. Review the data against your pre-defined acceptable parameters
  3.  For any data that isn’t what you expected, look closer at the cases to see if you can find out why
  4. Decide if you want to act based on what you find, and if so, what that action will be
  5.  Create another review point to check that the action you’ve taken has corrected the issue
  6.  Document everything you’ve done and why, including your thinking behind the decision

Using this approach, your data reviews should be pretty straight forward.

Let’s not forget that acting on data isn’t new – you’re probably doing it every day already. The difference is that for Consumer Duty, you need to document every step of the process.

6. How to you record any actions you’ve taken?

Consumer Duty is clear on the importance of evidencing what you’ve done, but more importantly, you need to document why you chose that course of action, and if it contributed to good consumer outcomes.

To use financial services exams as an analogy, if TCF was getting the right answer, Consumer Duty is all about showing your workings. It’s not good enough to get the right outcome, you need to show the steps you took to get there, and how you’ve confirmed that everything is working as expected.

As with the data itself, where to capture what you’ve done as a result of reviewing it is the next piece of the puzzle. Whilst you could keep records in your current back-office system linked to each client, this makes it much harder to spot and report on trends at a macro level.

The ideal solution is a technology system which allows you to record data at a customer level, but also aggregate it for reporting. To our knowledge this doesn’t exist at present so for the time being you’re either going to have to build your own (time consuming and potentially costly) or use less sophisticated means like Excel and Word.

If you tag onto your data collection spreadsheet a section for actions taken for each area, this is visually linked to the data (making it easier to reference in future) and relatively easy to transfer into a report.

It’s not perfect and we hope that a tech provider will create something sooner rather than later to address this issue, as having to rely on spreadsheets for such important reporting in 2023 just doesn’t seem right!

7. What’s the best way to report everything

You’re expected to report on the effectiveness of your Consumer Duty work to the board. This enables them to confirm that the firm are acting to deliver good consumer outcomes.

If you are the board (ie sole adviser practice), then having a meeting with yourself to review the data is overkill. The FCA have said that firms should be proportional in their actions when it comes to Consumer Duty (which we thought was a pretty impressive).

That being said, what gets measured gets done, so you do want to book set time in your diary, at whatever intervals you’ve decided, to ensure you do review the data, and act accordingly.

Most importantly, you need to document your findings. It doesn’t matter that there’s just you in the business, there needs to be a record of what happened. Think of it as a suitability report on how you give advice and ensure its effectiveness. Just like a suitability report, if it’s not written down, it didn’t happen. So write it down!

For larger firms, we recommend having a Consumer Duty reporting document, or section of your current MI/board report. This was you can show in once place a summary of the data you’ve captured, what you’ve found from it, what you’ve done about it and if it worked.

The Consumer Duty report can be an addendum or just another section of your board report; the most important thing is that it’s in there for the board to see, and therefore focus on. The old saying “out of sight, out of mind” still rings true today, and as Consumer Duty is pretty important it needs to be “in view” at all times.

We’d also suggest that you regularly send out some of the data to everyone in the business. Consumer Duty isn’t just for a compliance department or the board; the whole business should understand their part and how you’re doing as a firm.


Using these 7 points should give you a massive head start when it comes to forming your Consumer Duty data strategy. If, however, you’re not sure where to start, or want to run what you’re thinking by a sounding board, get in touch.

It’s important not to beat yourself up if you’ve got stuck – lots of people have. No question is silly, just unanswered. And remember, it’s OK to ask for help!


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