The activity by the Financial Conduct Authority has been ramping up in recent years, particularly with the FCA’s final Consumer Duty deadline passing in July. Firms are under increasing scrutiny to act fairly, and in the best interests of their customers. Last Friday, the Court of Appeal ruled that a string of motor dealers had breached fiduciary duty to customers by mis-selling motor finance to them, without their knowledge of an associated commission structure being paid by lenders.
With the Finance & Leasing Association (FLA) reporting that “…the implications of [the judgment] stretch far beyond the motor finance sector”, it’s evident that the financial services sector as a whole need to be focusing on tightening their compliance measures with the Duty and exhibiting enhanced transparency for better customer outcomes. Let’s take a closer look at how you can do this.
Conduct thorough and regular business planning
Good customer service doesn’t just happen on its own—it comes from the combination of forward planning, efficient processes and a continuous focus on perfecting the customer journey. With the New Year dawning quickly upon us, now is a great time to recognise any areas where your firm has fallen behind on its promise to put its customers first.
Reviews should involve looking at both direct and indirect downstream impacts and the compounding effects of previous issues that have been caused by the firm. Then, off the back of this, developing clear and comprehensive methodologies that frame a customer-centric view for improved service levels that are compliant with regulatory requirements.
These methodologies should be developed as longer-term plans to ensure that continuous improvement is a key part of your culture. For example, maturing your remediation templates will ensure you have the necessary resources and capabilities on hand when crises strike—such as during peak periods for complaints. In doing so, the costs and risks associated with the remediation process can be better managed and a greater understanding of the root cause can further improve customer outcomes.
Get to the root of customer complaints
With the financial services sector being under increasing pressure to solve money matters swiftly for consumers, firms have often found themselves looking to resolve issues just as quickly but neglecting to get to the root cause of the issue in doing so. Without understanding the underlying problem at hand, firms can end up wasting valuable time and resources trying to resolve similar problems down the line. In addition, an influx of complaints around the same ongoing issue could also trigger regulatory action to be taken on your firm, as it shows non-compliance with the requirements set out by the FCA.
Optimising the complaints process needs to be focused on minimising the need for customers to complain in the first place. More firms nowadays are conducting a Root Cause Analysis to do just this. These assessments can help firms identify and improve customer pain points and provide the recommendations needed to rejuvenate your processes and increase overall customer satisfaction.
Collect customer feedback for early resolution
Knowing how your customers are feeling after any given interaction with your company is imperative to build towards better customer outcomes. This also provides the opportunity for those “silent sufferers”—the customers you have who won’t express dissatisfaction unless prompted— to share their opinions, giving you the chance to identify areas of improvement needed to reduce the risk of additional complaints.
Showing initiative and proactivity in addressing customer dissatisfaction is key to better outcomes which need to be demonstrated to the FCA. This can be done through direct interactions with customers, such as via customer service representatives during or after the interaction, or by using automated distribution technology (sending out post-communication surveys to gauge customers’ immediate thoughts or by integrating Voice of the Customer software) to collate and analyse customer insights.
Harness the power of data
Focusing on the numbers, as well as the words, when it comes to your customer feedback is crucial in ensuring you have oversight of the whole picture. By translating this data into valuable insights, firms can then be in a much better position to understand customers’ experience and preferences.
With the use of intelligent data analysis, firms can also improve many of the core customer experience metrics that potential customers, and regulatory bodies, will be looking for. This includes the net promoter score (NPS), customer satisfaction (CSAT), and lifetime value (LTV) scores. Measuring improvements across these scores can be a much easier way of seeing positive changes across businesses.
Refresh your customer experience (CX) strategy
Often, the issues within customer service areas are down to operational matters that may need adjusting – with so much going on, it can be difficult to identify these. This is where the help of specialist customer experience consultants can help in reimaging the vision for customer journeys across the business.
These specialists are highly skilled in tailoring strategic solutions for organisations and the challenges faced. They will identify improvement opportunities and ensure that firms do not just meet but exceed customer expectations whilst maintaining regulatory compliance.
With the FCA still yet to comment on the final judgement in the recent motor finance commission cases, many are expecting a further crackdown on the overall sector with regards to customer transparency, fairness, and building better outcomes.
Firms should already be focused on building these better customer outcomes, but with the five steps above, you can ensure you have a solid foundation to build on if new recommendations come in.
Need a hand? Our consulting experts are always on hand to assist, whether you want to discuss any new regulatory advice that comes out or are looking to give your customer experience a refresh. Get in touch today for a chat and to find out more about how we can help you.
