From Disclosure to Customer Outcomes
Why telling customers is not the same as helping them understand
For a long time, financial services have been very good at disclosure.
If there is a risk, disclose it. If there is a cost, disclose it. If there is a condition, disclose it. If there is a regulatory warning, include it.
And in fairness, that logic has not disappeared. Disclosure still matters. Customers cannot understand information they have not been given. But under Consumer Duty, disclosure is no longer the end of the question. The harder question is whether the customer has understood what the disclosure actually means for them.
That distinction sounds subtle. In practice, it changes almost everything.
The problem with “we told them”
The old comfort blanket was this: the information was in the document.
The risk was on page 7.
The fee was in the table.
The action deadline was in the footer.
The customer ticked to say they had read it.
From a disclosure-based perspective, that may feel reassuring. The firm can point to the sentence and say: “we told them.” But from a customer understanding perspective, that is not enough.
Because customers do not experience documents as compliance inventories. They experience them as journeys. They read imperfectly, selectively, under time pressure, with varying levels of confidence, knowledge and attention. They do not assemble meaning by politely collecting every relevant disclosure and arranging it into the correct legal and commercial structure.
Often subconsciously, customers will ask themselves:
What is this product or process?
What does it mean for me?
What could go wrong?
What do I need to do?
What happens if I do nothing?
What am I giving up?
What am I relying on?
Where do I go if I need help?
If the document does not help them answer those questions correctly, then the fact that all the required information appears somewhere in that document is not enough. That, I think, is one of the most important practical shifts created by Consumer Duty.
Consumer Duty changes the test
The FCA’s consumer understanding outcome does not simply ask firms to communicate in a way that is fair, clear and not misleading. It asks firms to support customer understanding so that communications meet customers’ information needs, are likely to be understood, and equip customers to make effective, timely and properly informed decisions.
That is a different kind of obligation. It moves the focus from information provision to decision support. The question is no longer just “Have we disclosed the relevant facts?”. It becomes “Has the customer understood the facts that matter, in the right relationship to each other, at the point where they need to make a decision?”
That is where many traditional approaches to literature review start to struggle.
A document can contain all the right disclosures and still fail to create the right practical understanding. The problem may not be that the risk is missing. It may be that the risk is buried. Or split across three sections. Or explained only after the benefit. Or placed in a table that customers do not know how to read. Or drafted in a way that is technically accurate but cognitively heavy. Or introduced too late for the customer to use it properly.
In other words, the issue is not always the absence of disclosure. Sometimes the issue is failed assembly.
Why CUE starts with the underlying understandings
This is the problem CUE has been trying to solve.
When we look at a customer communication, we do not start by asking only whether the document contains the right disclosures. We start by asking what the customer needs to understand.
That means taking the disclosures, product mechanics, risks, costs, conditions, actions, deadlines, exclusions and support routes, and mapping them into the core understandings that sit behind the document.
We call these Foundational Concepts.
A Foundational Concept is not just a sentence in the document. It is the mental model the customer needs to form from the information they are given. For example, in an investment document, the relevant understanding may not simply be “The product has a fixed dividend feature”. The real customer understanding may be “The product offers better potential terms because I am taking on a particular risk.”
This is not merely disclosure. It is the concept the customer must grasp if the communication is to work.
This is where the move from disclosure to outcomes becomes practical. We are still anchored in the disclosures. We are not inventing separate academic questions detached from the document. But we are asking what those disclosures are trying to help the customer understand.
Testing disclosures through the concept they support
One of the challenges with customer testing is that it can easily become superficial.
You can ask customers to recall individual facts.
You can ask them where something appears.
You can ask them to repeat a percentage, deadline or definition.
You can ask a question so obvious that everyone passes.
Or you can ask a question so technical that the test measures exam technique rather than understanding.
None of that tells you very much.
The better question is: what misunderstanding could reasonably arise if the customer failed to connect the disclosures properly? That is why CUE maps disclosures into Customer Outcome Facts and then into Foundational Concepts. The process asks:
What facts does the customer need to understand?
Which of those facts affect decisions, expectations, actions, costs, risks or protections?
What foreseeable harm or poor decision could arise if they misunderstand them?
Which facts sit together because they support the same mental model?
How can we test whether that mental model has actually been formed?
This means that consumer testing is not detached from disclosure. It is testing the disclosures, but at the level where they matter. Instead of asking, “what does paragraph 4 say?”, the test asks whether the customer has understood the practical meaning created by paragraphs 4, 7 and 11 when taken together.
That is much closer to real life.
Customers rarely misunderstand one isolated sentence. More often, they misunderstand how several true statements interact. They see a benefit, but not the limitation. They understand a feature, but not the condition. They see the process, but not the consequence of delay. They understand that something can happen, but not when, why or how it affects them.
That is where foreseeable harm often sits. Not in the missing disclosure, but in the failed connection.
Why surveys and interviews do different jobs
This is also why testing customer understanding via surveys and qualitative interviews should not be treated as interchangeable.
A well-designed survey can test whether customers understand the key concepts at scale. It can show whether a target market broadly grasps the customer outcome facts that matter. It can identify which concepts perform well, which fall below a benchmark, and whether misunderstanding differs across customer groups.
But a survey has limited airtime. You cannot ask everything. You cannot turn a customer test into a regulatory interrogation. Every question has to earn its place.
That is why the work before the survey matters so much. If you have not mapped the disclosures into core understandings, the survey can easily test the wrong things. It may test what is easy to ask, rather than what matters most.
Qualitative interviews do a different job. They help diagnose why understanding is breaking down.
Is the wording unclear?
Is the concept unfamiliar?
Is the document too dense?
Is the key risk introduced too late?
Are customers failing to connect a table to the surrounding explanation?
Are they skipping a section because the heading does not signal importance?
Are they overconfident because the document feels familiar, even though the product mechanics are not?
This matters because a poor result does not always mean the same thing.
Sometimes the sentence needs rewriting.
Sometimes the explanation needs an example.
Sometimes the risk needs more prominence.
Sometimes the order of information needs changing.
Sometimes the document needs to stop making the customer piece the meaning together like a puzzle.
That distinction is crucial. If the wording is the problem, rewrite the wording. If the journey is the problem, redesign the journey. If the concept is the problem, teach the concept better.
The document itself can create the burden
This is one of the things I think is easiest to underestimate. Customer understanding is not only about language. It is also about architecture.
A document may be written in plain English, but still be hard to understand because the route through the information is confusing. The customer may be given the right facts, but in the wrong order. They may be asked to understand the consequence before they have understood the mechanism. They may see an important exception only after they have already formed the wrong impression. They may need to combine a definition, a risk warning, a table and a footnote before the real meaning becomes clear.
That is where the spiderweb problem appears. The document contains the information, but the customer has to crawl across it in several directions to assemble the point.
This is not a trivial issue. It goes directly to the FCA’s focus on whether information is provided at the right time, in a way customers can understand, so they can make effective decisions.
If the customer can only understand the product by piecing together scattered disclosures, the firm may have told them everything while still failing to help them understand.
That is the difference between disclosure and practical understanding.
Why the process needs to be auditable
Of course, none of this works if it is just a clever opinion.
In a regulated environment, firms need evidence. They need to show why certain concepts were tested, why certain questions were asked, what results were found, what changes were made, and whether those changes were likely to improve customer understanding.
That is why the process has to be structured.
At CUE, the logic is:
Start with the source communication.
Extract the customer outcome facts.
Group those facts into Foundational Concepts.
Identify the foreseeable misunderstandings or harms.
Design survey questions around the concepts that matter.
Use qualitative interviews to explore how customers navigate, interpret and assemble the information.
Distinguish wording failures from journey failures.
Record the evidence chain.
Use the results to improve the communication.
That evidence chain matters because it prevents customer testing from becoming arbitrary. It also helps firms avoid two common mistakes.
The first mistake is testing every disclosure as if all facts are equally important. They are not.
The second mistake is testing a few generic questions and claiming they evidence understanding. They usually do not.
The right approach sits between those extremes. It is disclosure-led, but outcome-focused. It starts with the facts, but tests the practical understanding.
A firm should still be able to point to the relevant information in the document. But it should also be able to explain how that information supports customer understanding, what misunderstanding could arise if the information is not understood, and what evidence it has that customers can use the information in practice.
That is a much more demanding standard than “we said it somewhere”. But it is also a more useful one. The task is no longer simply to tell customers more. It is to help them understand enough to decide well.