Introduction

The Financial Conduct Authority (FCA) introduced the Consumer Duty, effective July 31, 2023. This regulation aims to fundamentally shift the approach of firms, ensuring better protection for UK retail consumers. The Consumer Duty mandates a holistic, principle-based approach, compelling firms to deliver positive outcomes in product offerings, customer support, pricing, and consumer understanding. Furthermore, firms must adhere to cross-cutting rules, such as acting in good faith, preventing foreseeable harm, and empowering consumers to achieve their financial goals.  

The outcomes-based regulation framework under the Consumer Duty necessitates significant changes within firms, particularly in terms of their culture, policies, and practices. This shift towards higher standards requires a comprehensive re-evaluation of business strategies to ensure compliance and align with the new regulatory landscape. As such, adapting to these "game-changing" regulations is never a straightforward task.

To recognise and celebrate the exceptional efforts made by organisations in implementing the Consumer Duty, Deriskly organised the inaugural Consumer Duty Leadership Awards earlier this June. The awards feature eight distinct categories, covering various areas within financial services. An independent panel of judges, comprising leaders from industry, academia, and non-profit organisations, assessed the entries, highlighting those firms that have demonstrated outstanding commitment and innovation in adhering to the Consumer Duty.

The Consumer Duty Leadership Awards Spotlight Series aims to highlight the achievements of our winners.

Cheryl Pidler, Hinckley and Rugby Building Society – Consumer Duty Champion of the Year

Our first spotlight in this series features Cheryl Pidler, at Hinckley and Rugby Building Society (HRBS) and the winner of the category, Consumer Duty Champion of the Year.

Cheryl is the Director of Operations and ConsumerDuty Champion at HRBS - a mutual organisation that has supported its members with their savings accounts and mortgages across the UK for almost 160 years since its establishment in the 1860s. Based in Hinckley, Leicestershire, the society had recently undergone a transformational re-branding, in line with the spirit of the Consumer Duty.                            

“Our new, more modern brand is more than a colour change, it reflects the significant transformation journey we are on, and underscores our renewed commitment to put our customers at the heart of everything we do”

                       – Hinckley & Rugby Building Society

Cheryl was honoured as our Consumer Duty Champion of the Year, not just for her role in implementing and integrating theConsumer Duty within the organisation, but for her visionary approach. Cheryl identified the introduction of the Consumer Duty as a pivotal opportunity to drive a transformative shift towards a more consumer-centric model.

How have you culturally embedded the Consumer Duty within HRBS?

At the Society, we have embarked on a transformative journey to redefine our purpose, ambition, and values. We first began by challenging ourselves by asking : Why are we here? What purpose do we serve for our members and the broader community? How can we leverage on what we currently have to bring that purpose into life? We realised that our main purpose as a building society is to support our members and the community in achieving their financial goals. We're here to help them with their financial needs and secure their financial future for them.

Turning to our values, we knew we had to distinguish ourselves from other organisations. We focus on what we call the"Five E's"—Expertise, Ethics, Experience, Efficiency, and Engagement. These values are central to our identity and guide our actions. By leveraging the unique strengths of our team members, we aim to collectively draw on these strengths to fulfil our purpose. This means not only harnessing our expertise and experience, but also working together efficiently and ethically, with a strong commitment to engaging with our members and the community.

We made sure to engage with our employees, and they fully support this new direction. We have integrated these purposes and values into our performance management framework, ensuring they permeate everything the Society and our staff do. Moreover, we have established open channels to train and strongly encourage all staff to proactively raise issues with processes or communications that they believe may lead to potential harm.

How has HRBS restructured its internal teams to better align with the Consumer Duty, and what roles have been established to ensure a customer-centric approach?

To bring our renewed ambition to life, we implemented several key organisational changes:

Customer Operations Team

In line with our renewed purpose and values, we merged our back-office mortgage and savings teams into a unified CustomerOperations Team with a focus on the customer’s journey, needs, and experience. Previously, these teams functioned independently, and were focused on their respective products. We recognised that this led to fragmented customer journeys, as customers often encountered different processes depending on whether they were dealing with mortgages or savings, which could be confusing and inefficient. By consolidating these teams, we've eliminated the need for customers to navigate between different departments or face varied processes for different products. This restructuring means that regardless of whether a customer is dealing with mortgages or savings, their experience and journey remain consistent and focused on their needs rather than on specific products.This shift ensures consistent support for customers and the alignment and integration of their journeys.

Customer Outcomes Monitoring Team

The newly established Customer Operations Teamworks closely together with the Customer Outcomes Monitoring team by assessing stages of the customer journey. Their responsibility is to ensure that every interaction and process aligns with our commitment to delivering positive outcomes for our customers.

New Chief Customer Officer (CCO)

We have also invested in a new CCO, whose role is to represent the customer’s voice at all levels of the organisation, including the executive team and the board. Working closely with me (theConsumer Duty Champion), The CCO is tasked with overseeing the review and adjustment of products, processes, and communications to ensure they are centred around customer needs. This role is crucial in shaping the future direction of the Society, ensuring that every decision considers the impact on our customers.

Are there any innovative ways that HRBS has implemented the duty?

At HRBS, innovation is at the heart of our commitment to the Consumer Duty. We are continuously exploring new ways to engage and interact with our members, ensuring that our services are not only accessible but also tailored to meet the evolving needs of our digital-savvy consumers. Our renewed ambition has led us to embrace digital transformation, enabling a more modern and streamlined interaction with our members, and complements the existing face-to-face service provided via our branches, which we know customers value.  

One of the key innovations we introduced is a customer dashboard. The dashboard serves as a central hub for all customer-related activities, providing a user-friendly interface that enhances the overall customer experience.

Along with creating innovative ways to better interact with our members, this customer dashboard also plays a crucial role in our implementation of the Consumer Duty. It allows us to monitor and gather metrics related to the four outcomes and cross-cutting rules, giving us a clear birds-eye view of customer interactions. This data is invaluable for identifying trends, making strategic decisions, and taking preventative actions to avoid potential consumer harm. By analysing this data, we can address overlooked issues and continuously improve our services.

For example, the board meets every month to focus on the insights provided by the dashboard. We review what actions we need to take to achieve early intervention or to enhance our customer service and performance.  

This engagement ensures that we stay attuned to their needs and expectations, allowing us to make informed decisions that align with their interests. The customer dashboard remains a critical and dynamic tool for HRBS. It not only provides visibility into emerging issues but also allows us to respond swiftly and appropriately. As we continue to innovate, our goal is to uphold the highest standards of customer service, ensuring that our members always feel valued and supported.

How have you changed your products and communications? What have you noticed since the re-branding of HRBS?

At HRBS, our recent rebranding has led to significant changes in how we offer products and communicate with our customers. These changes are part of our commitment to making banking simpler, more transparent, and more accessible for everyone.

Simplified Product Range and Transparent Pricing

One of the major shifts we've implemented is simplifying of our product range. We've streamlined our offerings to make it easier for customers to compare rates and benefits across both open and closed products. Instead of just reducing the number of products, this consolidation also ensures that every product we offer is clear and straightforward. We’ve also simplified the terms and conditions, translating them into plain English to help customers make informed decisions without the confusion of financial jargon.

Clear and Accessible Communications

In line with our commitment to transparency, all our communications are now crafted in plain English. We’ve made a concerted effort to eliminate jargon, ensuring that our messages are clear and accessible. This approach helps us build trust with our customers, as they can easily understand the terms and conditions, product benefits, and any other important information they need to know.

Innovative Products for Unique Customer Needs

Innovative products tailored to meet the needs of often overlooked customer groups are another key aspect of our transformation.For instance, we've launched mortgages specifically designed for individuals on skilled worker visas—customers who might otherwise struggle to secure a mortgage due to complexities in income, credit ratings, or residency status.

To serve these unique customer segments, we use a more personalised approach. Instead of relying solely on automated decision-making tools, we employ manual underwriting. Each application is. assessed manually and individually, allowing us to understand the specific circumstances and needs of our customers. For challenging cases, we refer them to the HRBS Mortgage Referral Committee and do our best to give them the best. chance of securing, a mortgage. This committee reviews cases that don't quite fit traditional criteria but deserve a closer look. This hands-on approach ensures that we can offer products to customers who might not meet the standard criteria used by larger banks like HSBC, but who still have viable financial situations.

What are your goals for the next two years?

At HRBS, our strategic objective for the next two years is to solidify our position as a customer-centric organisation, with a focus on helping customers achieve their financial objectives. A key part of this strategy involves ongoing training and raising awareness among our staff about the importance of embedding the Consumer Duty in all our actions. We will conduct continuous reviews of our customer service and support systems, encouraging staff to propose improvements and efficiencies.

We recognise that innovation within the mutual sector has lagged behind other areas of financial services. To address this, we are committed to advancing our digital transformation. This includes expanding our product and service delivery channels to enhance our traditional face-to-face branch interactions with robust digital services. This year, we plan to implement personalised, timely, and tailored communications in our partnership with a digital durable medium platform. This initiative aims to increase customer engagement while providing us with valuable data and insights into how customers interact with our communications.

Furthermore, we are expanding our member panel to gather more feedback and perspectives from our customers. This will help us to better understand their needs and expectations. The customer dashboard will continue to be a crucial tool, providing real-time insights and allowing us to identify and respond swiftly to any emerging issues. Through these efforts,HRBS aims to deliver exceptional service and support to our customers, ensuring their needs are always at the forefront of our operations.

Conclusion

The Judges have selected Cheryl Pidler as the Consumer Duty Champion of the Year, recognising their exceptional efforts in not only going above and beyond expectations but also in HRBS's restructuring and refocusing their approach to consumer-centricity. Cheryl's team has successfully aligned their strategies with all of the Consumer Duty’s outcomes and cross-cutting rules, demonstrating a clear commitment to delivering the best possible results for their consumers. We would like to extend our heartfelt appreciation to Cheryl and her remarkable team for their time and dedication.