How Aveni is helping to steer the ship towards Consumer Duty implementation


Founded in 2018, Edinburgh-based Aveni claims it is leading a ‘new era of risk assurance’ by enabling 100% digitisation and automation of the Quality Assurance process. The soon-to-be-introduced Consumer Duty legislation is proving a key part of this offering.  

Consumer Duty – which must be implemented in the UK by 31 July – is, according to the FCA’s definition, focused around making sure that consumers should get communications they can understand; products and services that meet their needs and offer fair value; and that they get the customer support they need, when they need it.

Last year, Aveni said it promised to help financial services businesses meet new Consumer Duty regulation with the development of its Aveni Detect product. The firm said its platform uses the latest advances in NLP (natural language processing) to monitor every customer interaction to produce data-led evidence of compliance with new legislation.

The Aveni Detect platform – developed as a ‘machine line of defence’ – analyses all customer interactions and mitigates against a range of risks from conduct and complaints to customer vulnerability. Aveni said this elevated level of risk insight ”will become essential in meeting data-intensive demands of consumer duty”.

“It’s fair to say that Consumer Duty has a big impact on any organisation and will be a step change compared to what they are used to,” according to Aveni COO Jamie Hunter. Previously, the FCA approach was largely about making sure companies had the right governance process in place and an oversight model. This model is transitioning to one that puts the customer at the heart of all your decisions and ensures that all customers – not just the most vulnerable – are getting fair outcomes”, Hunter remarked.

“These are really quite far-reaching impacts to allow companies to track and watch every part of an organisation’s operating model”. Hunter added that he believes that while the implementation deadline is July, the reality is that the full introduction of the Duty will go on for a couple of years and will “be a part of the regulatory framework for years to come”.

Changing the relationship

The core purpose of the introduction of Consumer Duty is to provide better outcomes for consumers and ensure they are properly informed about the products and solutions they are using or purchasing.

With Consumer Duty Hunter believes the FCA is trying to force organisations to look and listen to their customers more and making sure that their services and compatible and fair – and the Duty is really about enhancing trust in financial services.

“I suppose the main outcome here should be that as a consumer of financial services – which most of us are – the service we receive should improve and the support that we can get is better,”. “I think what will happen for these organisations – especially the ones that do it right – is that they will begin to understand better which assets and services their customers’ value.

“They’re going to have a lot more customer insight which they can then use to drive their offering going forward – so it should drive better outcomes for both the businesses and the consumers. But it will be a journey to get there because it requires data and investment.”

What is Aveni doing to help with this transition? Here Hunter cites Aveni Detect, a product that is focused on automated risk assurance and risk oversight. “Typically, in organisations there is some form of acuity framework in place and random sampling in place and there is reporting which happens off the back of it – that’s like a needle in a haystack.

“Suppose the FCA was to come in and ask them to demonstrate good customer outcomes, they can only do it on a small sample of calls that they have received. However, with Aveni, the company can introduce assurance across 100% of calls.”

The product offers a machine assessment, which looks for the Quality Assurance questions that are in place within an organisation and looks for client vulnerabilities as well as dissatisfaction – with this, they can then triage this information. We do this so that the human effort is spent on the areas that we know we can do something about,” said Hunter.

The area where Aveni’s input is particularly important is in consumer understanding and consumer support. Hunter qualified: “We’ve been able to demonstrate that businesses are listening to their customers, and we have also introduced Consumer Duty dashboards which demonstrate alignment with the four principles of Consumer Duty. These can then be served up to the CRO or the QA manager, as everyone is beginning to live and breathe consumer outcomes, which is really what the FCA is aiming for.”

AI’s role in RegTech

The rise and evolution of AI has sped up rapidly in recent years, with the introduction of ChatGPT earlier this year putting rocket boosters on this already fast-growing space. How is the role evolving in RegTech?

From Aveni’s experience with clients, Hunter claims that they are seeing almost all financial services organisations considering implementing an AI-focused transformation project. “Investment in technology and investment in AI is proving to be high on the agenda. Data is key and will continue to be so. There is endless amounts of data there, and humans cannot analyse all of that –that is where the AI comes in. It is at its strongest when it is validating large volumes of data and providing a checklist of actions off the back of it.”

Looking ahead, what impact could this have on RegTech? Here, Hunter believes that AI in the sector will have a positive impact on risk functions, due to a lot less time being spent on box-ticking processes and more time being spent on understanding how to mitigate and reduce risk.

How can AI technology enable the better identification and mitigation of risk? On this point again, Hunter explained the key role that AI plays alongside the human factor.

“It’s impossible to have 100% oversight of interactions if they are done manually, it would just be way too expensive for an organisation to do it. So, here technology allows you to get that oversight in a scalable and efficient way with actions arising from that. It’s not fully about replacing the human here – its more about having a way of identifying instances – ‘machine line of defence’ for users – that you can then go and do something about.”

Value drivers

One of the key findings since the announcement of Consumer Duty  has been that the regulation is leading to bigger budgets for risk functions. In Hunter’s view, quite often it is the opposite – with risk managers and officers being required to do more with less.

He explained: “What I believe we will see off the back of that is that the tools that are in play for risk functions are going to be significantly better. They are going to be receiving significantly more data that can impact that organisation.”

Hunter believes companies will be able to take more valuable information from their risk function or CRO and offer that information across the whole business.

He continued, “They’ll be getting instances of product development opportunities, client development opportunities, client retention strategies and things like that. These are all operating risks, effectively, but they are still risks, they are just more commercial.

“I think for those tick-box compliance risks, technology can probably do a lot of that. What it means is that a lot of these functions can be more focused on becoming commercial, driving value, and presenting information to the board or the executive committee. So, hopefully, this means they are better equipped to drive value.”

RegTech trends

As the RegTech sector continues to evolve the trends that permeate the industry continue to evolve with it. What are some of the key trends that we can expect to stand out in the industry?

In this, Hunter highlights that Consumer Duty remains a key trend across the market. Beyond Consumer Duty, however, he also underlined that greater company budgets within the sector, “I think the fact that there is budget there is going to drive buy-in action in the RegTech industry – many of these companies have now got the money to go and invest in RegTech offerings”.

He also emphasised that many people are now becoming aware of large language models, such as ChatGPT, which has made these models mainstream to everyone.

“I think you will begin to see more offerings coming out of this space from a RegTech point of view and more organisations exploring the impact of these large language models.”

On this same point, however, Hunter highlighted this may lead to a greater focus in the future on the risks of AI – such as the actions and decisions driven from AI platforms and how stakeholders can be more confident with the use of AI.

Future plans

Looking toward the future, the main focus ahead is still surrounding Consumer Duty. Hunter remarked: “We’re releasing Consumer Duty dashboards, which is another way of reporting against the Consumer Duty outcomes.”

In addition, with the implementation deadline coming up, Hunter highlighted that the company would be continuing to roll out webinars for support and to help customers in that area.

Furthermore, Hunter noted that Aveni has also partnered with a number of leading consulting firms to provide consultancy support on the implementation of Consumer Duty.

Delta Capita, a global capital markets consulting, managed services and tech provider, recently partnered with Aveni to boost its Consumer Duty offering.

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