The CII's third annual roundtable on Consumer Duty Board reporting found insurance and financial planning firms are becoming more confident in their reporting and making greater use of data, but practical challenges remain around evidencing outcomes.
Around 75% highlighted difficulties with integrating data, sourcing appropriate information and connecting different datasets.
The CII also identified challenges around demonstrating whether customers understand products and communications.
Firms were more likely to have processes for responding when customer misunderstanding had already been identified than mechanisms for detecting it in the first place.
Participants said better testing at key decision points, clearer measures of outcomes and a more joined up approach to customer behaviour data could help address the issue.
The roundtable, held in July, included representatives from the Financial Conduct Authority alongside participants from insurance, financial planning, compliance, customer insight and professional standards.
According to the CII, the FCA reiterated the need for firms to move away from treating Board reports solely as a compliance exercise and instead use them as governance tools to identify and improve customer outcomes.
The discussion also raised the issue of proportionality for smaller firms.
Participants said smaller businesses may have closer relationships with clients and be better placed to investigate individual outcomes, but can lack the resources, scale and internal independence available to larger firms when testing customer understanding and evidencing outcomes.
The CII said it plans to develop further sector specific guidance following engagement with firms, members and the regulator.
Adam Harper, executive director of strategy, advocacy and professional standards at the CII, said: "The real test of Consumer Duty Board reporting is whether firms can use the evidence to understand where customers are experiencing poor outcomes and take meaningful action to improve them. The CII will build on this work with the development of further practical guidance to support firms as we strengthen our sector’s delivery in accordance with Consumer Duty."
