Consumer Duty – a formula for successful management reporting

Why Einstein’s theory of relativity offers lessons for management information

The early results of Sionic’s Market Insights Survey 2023 on Consumer Duty* indicate that two thirds of firms have found it challenging to develop a management information (MI) framework to satisfy reporting and monitoring expectations. Let’s take a closer look at this.

*The full survey results are due to be published in May. 

What does Albert Einstein’s theory of Special Relativity have in common with management reporting for Consumer Duty? At face value, probably not much. But let’s scratch a little under the surface.

German-born physicist, Albert Einstein used a mathematical formula to explain this theory that mass and energy are the same physical entity and can be changed into each other. Using an equation he demonstrated how an increase in the mass (m) of a body, times the speed of light squared (C2) is equal to the kinetic or full energy (E) of that body or E = MC2. This simple equation changed the world, overturning theories that were centuries old and led to the development of modern physics.

Turning over attention to Sionic’s 2023 Market Insight Survey into Consumer Duty (due to be published later this Spring), we identified that nearly two thirds of firms have found it challenging to develop a management information (MI) framework to satisfy reporting and monitoring expectations.

If Einstein’s formula was simple and successfully solved a world phenomenon, could we use this formula to solve the management reporting challenge?


In transposing Einstein’s formula to this context, firms may be able to solve the complexities faced in their MI endeavours. This formula provides principles that can be applied by firms to achieve their potential or ‘full energy’ in meeting their regulatory obligations and more importantly achieve good customer outcomes.

Here’s how it works.

Expected outcomes

In the lead up to previous milestones, firms will have defined what ‘good’ outcomes look like. These can then be used as the starting point from which the MI framework is designed and as the benchmark against which firms can validate how they are performing in delivering good outcomes to customers.

The MI framework should consider good outcomes across all target customers, channels of engagement and products and services offered.


Once the expected outcomes are defined, the firm should then turn their attention to how they will ensure these good outcomes are achieved.

The Financial Conduct Authority (FCA) expects firms to monitor and regularly review the outcomes customers are experiencing, which involves defining a framework for collection and reporting MI. Pertinent outputs from the framework include identifying sources of poor outcomes and harm which allow firms to swiftly respond when consumers do not experience the desired outcomes.

You can only manage what you measure.

In designing a MI framework, firms need to take into consideration their size, complexity, the nature of their products and services, customer types or characteristics and customer touch points. Firms need to apply the concept of ‘reasonableness’ in configuring their frameworks and overlay that with a risk-based approach. The scope of MI is essential and should span from the firms’ strategy through to detailed processes and the customer journey. Consumer engagement, behavioural and attitudinal metrics provide a broader consideration for good client outcomes.

Firms are data rich, so there is no need to reinvent the wheel. Understanding what is currently reported and the sources of information used within the firm will propel the efforts in designing a MI framework. A simple gap analysis will provide clarity on where efforts and priorities need to be shifted.

Applying the firm’s risk appetite and service standards to the MI framework will reduce the ‘noise’ of too much information and help firms respond to issues with laser focus.

Current context

Measurement does not exist in isolation. The context in which any MI framework is designed and implemented is critical.

You need to understand the needs of the firm’s audiences and the level of information that would be most effective for each. The audience will dictate the level of detail required and the frequency in which the information would be received. Governance structures also become important mechanisms for how information is disseminated and consumed.

Data is available in abundance, both in the structured and unstructured forms. But how is the firm using these data sets as sources of insight? Carefully consider the data quality and reliability, ease of access of information and the frequency of reporting required.

Framework implementations are not without their challenges. Our market insights survey provided some perspective on the challenges firms are experiencing, these included:

  • systems information not being in usable formats limiting the ability to effectively extract and aggregate information;
  • difficulty in identifying relevant information amongst an array of information available across the magnitude of sources;
  • complexities in pulling information from multiple systems that are not fully integrated impacting timeliness of the receipt of information;
  • low confidence in the integrity of the data.

Firms should know their constraints and have developed plans to overcome them.

Customer outcomes

Assuming an MI framework has been designed and is in place, firms are then required to think about how they will continuously monitor their customers outcomes.

The frequency in which metrics are monitored should be on a risk-based approach. Firms should actively investigate instances where poor outcomes are identified, understanding the root cause with the purpose of developing remedial actions. Key to Consumer Duty is organisation learning. The firm should learn through these monitoring processes, adapt and iterate the MI framework from these insights.

In conclusion

The formula for Special Relativity provides guiding principles in building a robust MI framework that will help firms meet their full potential. Meeting full potential means this is best effort a firm could apply to ensuring good outcomes for customers.

But of course every firm is unique, so finding the formula that works for your firm is important.

What is your firm’s formula?

Our award-winning team of specialists advises firms internationally on all aspects of operational resilience, and our full Consumer Duty Market Insights Survey 2023 is due to be released in May 2023.  Meanwhile, if you would like to discuss any aspect of this article or our practical approach, please contact us.

Meet the experts

Patricia Celata

Principal consultant

I have expertise in risk management and regulation, predominately in the wealth management and banking sectors.

Tracie Harbinson

Principal consultant

I am an experienced leader and multi skilled financial services professional with a passion for thought leadership, collaboration and innovation.