A follow up discussion to our session on Intelligiblity in 2024. This continues to be a focus for the FCA and with focus on consumer duty, measuring effectiveness of implementation, having tools to assess and quickly adjust communications can be invaluable.
Description
This session discussed the growing regulatory focus on consumer intelligibility, particularly in relation to the UK’s Consumer Duty and FCA guidelines. It explores how firms are using tools like Amplify, from Amplified Global, to improve communication clarity and transparency, ensuring they meet the needs of vulnerable customer groups. The conversation highlights the importance of data-driven decision-making, AI tools, and human collaboration to improve customer satisfaction and regulatory compliance. Experts from DEMSA, StepChange and Amplified Global provide insights into the practical application of intelligibility tools, offering case studies and results that show how better communication can lead to improved client outcomes.
Key Take Aways
- The Consumer Duty regulation now requires firms to focus on ensuring that communications with customers are clear, understandable, and tailored to their needs.
- Intelligibility is a legal requirement under the Consumer Rights Act and the FCA Handbook, and firms must ensure that customer communications meet these standards.
- The FCA’s focus on motor finance highlights the importance of transparency around commissions, with poor communication leading to major financial redress cases.
- The FCA’s fair value assessments are central to evaluating whether firms are delivering value to customers, requiring intelligible communications to be part of the process.
- Testing and monitoring are essential components of ensuring the quality and impact of customer communications, with increasing regulatory scrutiny on evidence of intelligibility.
- Consumer satisfaction has shown direct improvements linked to the clarity of communications, as evidenced by StepChange’s client satisfaction surveys.
- AI-driven tools like Amplify are helping firms evaluate and refine their communications, but human expertise remains critical for tailoring messages appropriately.
- The use of layering technology allows for more dynamic and personalized communication, improving accessibility and customer understanding.
- Vulnerable customer groups—including those with low literacy, non-native English speakers, and those in financial difficulty—require special attention in communication design.
- The timing of communication is critical; delivering key information at the right moment in the customer journey can prevent confusion and improve understanding.
- Firms must focus on improving high-risk documents, such as legal agreements, to ensure they are intelligible and transparent, particularly in financial services.
- The data-driven approach is essential for firms to demonstrate the effectiveness of their communication strategies and show evidence of compliance with regulatory expectations.
Innovation
- AI and intelligibility tools: Tools like Amplify are revolutionising how firms measure and improve the clarity of their communications, allowing for real-time feedback and score improvements.
- Layering technology: This innovative approach enables information to be presented in a dynamic, multimodal format, ensuring better engagement and understanding, particularly for complex legal documents.
- Continuous employee training: The integration of intelligibility tools into the training process empowers communication teams to enhance content from the ground up, ensuring better outcomes in customer engagement.
Key Statistics
- 17.7 million adults in the UK have poor or low levels of numeracy.
- 2,886 documents uploaded by StepChange using Amplify’s tool.
- 620 hours spent on editing communications to improve intelligibility.
- 194,000 edits made across different communications to improve clarity.
- 6% improvement in overall intelligibility of all StepChange’s documents.
- 11% improvement in reducing complexity in documents.
- 33% reduction in the use of complex words and sentences.
- Client satisfaction increased by 5 percentage points.
- Net Promoter Score increased by 6 percentage points as a result of improved communication clarity.
Key Discussion Points
- The evolving FCA expectations on ensuring intelligible communications, particularly regarding vulnerable customer groups and fairness.
- The legal basis for intelligibility requirements, with regulations under the Consumer Rights Act shaping how firms approach customer communication.
- The importance of simplifying complex communications, especially for high-risk documents such as legal agreements in financial services.
- The role of AI and data in assessing and improving communication intelligibility, with a focus on using evidence for regulatory compliance.
- StepChange’s approach to improving communication with clients, using intelligibility tools and feedback loops to enhance clarity.
- The impact of intelligible communication on customer satisfaction and progression through financial difficulty solutions, as seen in StepChange’s improved survey results.
- The regulatory push towards embedding intelligibility in all customer-facing documents and processes, with increased scrutiny from the FCA.
- The importance of timing in delivering communications, particularly in the context of financial products like motor finance, where early clarity can prevent future complaints.
- The intelligibility of high-risk documents, such as financial contracts, and the need for firms to reengineer them to improve transparency and fairness.
- The human-AI partnership required to make communications more intelligible, where AI tools support human efforts rather than replace them.
- The need for firms to measure and report on customer understanding consistently, with evidence to demonstrate compliance to regulators.
- The role of feedback and co-design in improving communications, with continuous testing to ensure documents meet customer needs and regulatory standards.
Presentations
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