The FCA 2020/2021 business plan was released last week and it reiterates that the industry must focus on the resilient outcomes that they deliver to customers when they design and deliver their services.
COVID-19 means that customer needs, and therefore the outcomes that customers expect, are constantly changing. A good outcome for a customer today is not necessarily good next week and in addition customers are likely to change the way they access services. It’s simply not enough to make a point in time assessment of outcomes against services and then assume that it will apply equally during and after the COVID-19 crisis. It is likely that the industry will need to adapt rapidly to temporary and permanent regulatory changes and requirements, particularly in relation to vulnerable customers.
For vulnerable customers – particularly those that struggle to engage through digital channels – this means constantly re-evaluating the outcomes. There are some fantastic examples (both in and out of the sector) of steps that have been taken to adapt services, including:
Financial services organisations need to re-define the customer outcomes they expect to deliver for COVID-19 and beyond with a special focus on vulnerable customers. There’s a wealth of data to help them do so – our salaries are changing as are our spending habits; there’s no excuse for a lack of data as transaction and financial data is readily available through initiatives such as Open Banking.
When a customer engages with a financial services organisation through a channel of their choice (telephone, web, chatbot) they should expect to have an informed conversation that takes into account their specific needs and outcomes based on sophisticated (and ideally automated) analysis of the readily available data. Channels and service should also be reliable with those that deliver the most important customer outcomes that involve life changing events (such as mortgage draw-down or making a medical insurance claim) receiving the greatest resilience investment.
But there’s some way to go to realise this ideal. Firms can set themselves up for success by taking the following actions:
Dynamically assess the needs of their most vulnerable customers and expect outcomes to be different before and after COVID-19.
Vulnerable customers are often less able to take advantage of digital channels. With the current challenges around face to face interaction, firms need to constantly assess the accessibility of their services to deliver the most important outcomes. For example, many banks are currently offering mortgage holidays for those who may find themselves in financial difficulty. This is at a time where call centres are taking up to 10 x normal call volumes. Customers are encouraged to use web forms, which is unlikely to be easy for some categories of vulnerable customer.
De-construct their most important services to understand how technology, people, process and suppliers are contributing towards resilient outcomes
Regulators expect that firms understand their most important services and how these are delivered to customers. They must then manage any risk to the resilience of these services through appropriate oversight. This is especially true for those who are accountable for operational resilience under the Senior Managers & Certification Regime (typically the SMF24s).
To understand how an end-to-end service is delivered, firms must create a mapping that shows how the technology, teams, processes and suppliers contribute towards the process. Only then will firms be able to see the weakest link in the chain and invest in making it more resilient.
Use data to allow outcomes to be tailored to personal circumstances
Financial services are too often delivered in an impersonal way. A good example is the recent FCA focus on persistent debt which requires card issuers to help customers manage their debt through tailored re-payment plans. The approach many firms take is to ask customers to go through long and complicated income and expenditure conversations with call centre agents. Customers become frustrated at having to provide data that is available elsewhere only to find their options are limited at the end of the process.
The alternative approach is to maximise the use of data to provide a rich and tailored customer experience through a range of channels. For example, income and expenditure analysis can be automated by looking at transaction patterns and firms can use chatbots to gather any additional information needed with agents able to step in should the chat require. This means that by the time the agent needs to speak with the customer, they have a wealth of information at their fingertips to help them provide an outcome that is tailored.
Resilience and adaptability are not alternative choices – firms need both to deliver the outcomes that customers expect in an uncertain world.
Regulators have made it clear that operational resilience is now as important as financial resilience and there’s never been a more important time to deliver for customers that are demanding support from the financial services industry in the most challenging times.
Adam Stringer is a financial services resilience expert at PA Consulting