Financial service providers may be shirking their consumer duty responsibilities, according to new research from open banking, open finance and payments provider Moneyhub.
Moneyhub found that 24 per cent of consumers believe their investment and pension providers fail to provide good quality support and after-sales care; suggesting that some financial service providers are not complying with Consumer Duty requirements set out by the Financial Conduct Authority (FCA).
The new research also highlights a difference in the service provided to consumers depending on their income. Around 42 per cent of people state they don’t find it easy to interact with their provider – a number that falls to 15 per cent among those at least £100,000 per year.
Forty per cent of those earning more strongly agree that they receive a personalised service from their provider; while only 13 per cent of those earning less than £100,000 agreed.
Technological shortcomings may be responsible for some of this disparity. In fact, 21 per cent of consumers said being able to make flexible top-ups, based on how much they have spare each month, would encourage them to add more into their pensions or investments. Meanwhile, 16 per cent believe they would benefit from easy-to-access projections on what their current savings could be worth in the future.
Open finance offers a simple route for providers looking to incorporate such propositions into their offerings. Alongside being able to find and view all their pension data, Moneyhub’s technology also allows consumers to connect to and see their bank accounts, credit cards, savings, property valuations, ISAs, loans, mortgages, and other financial products all in one place, allowing them to make better long-term financial decisions and embed healthier money habits.
Open finance technology to the rescue?
Mark Horwood-James, managing director at Moneyhub Personal Finance Technology, commented: “With the current availability of customer-focused solutions through open finance and open banking technologies, there’s no reason for consumers to be still struggling with feelings of uncertainty or neglect. Through the advance of technology, good financial guidance does not have to be exclusive to those who are wealthy enough to pay for the privilege.
“The opportunity is clear for financial service providers: empower customers to make better financial decisions and, in the process, improve their financial wellbeing and ability to save or invest. The race is on to deliver the best solutions and experiences that benefit all customers.”
Margaret Snowdon OBE, who sits on the advisory board of Moneyhub Financial Technology Ltd, also said: “The adoption of new technologies, especially in the form of open finance and open banking solutions, performs two important actions at once for pensions and investment providers.
“On the one hand, it is the only way to face up and respond to the new FCA Consumer Duty demands – the key elements of the relationship between the provider and consumer can all be addressed through the simple adoption of already available technologies. On the other hand, the technologies improve the customer’s chances of making the correct financial decisions at the right time, thus bettering outcomes for themselves and their provider.”
