Remediation is a costly exercise, with a total of £53 billion spent by UK banks since 2000.

In its recent business plan,1 the Financial Conduct Authority (FCA) highlighted its concerns about how long-standing customers are being treated. The regulator expects all firms to show, consistently, that fair treatment of customers is at the heart of their businesses.2 Failing to have the right products end up in the right hands throughout their lifecycle could be cause for remediation.

Remediation is a costly exercise, with a total of £53 billion spent by UK banks since 2000.3 News coverage and websites like MoneySavingExpert.com Limited have generated increased awareness and expectation of remediation.

Whilst remediation has caused much reputational damage to firms, swift and effective remediation, demonstrating exemplary customer service, offers firms the opportunity to rebuild trust and customer confidence.

Successfully delivering customer-facing remediation

Great remediation service can mitigate the damage of mistakes, and provide banks and financial firms with an opportunity to interact with their customers to demonstrate how they can put a customer’s interests first. To deliver effective remediation, a number of popular practices should be observed:

  1. Understanding the issue at hand through Root Cause Analysis (RCA)
  • Determining the cause of a given issue and whether the issue is ongoing;
  • Classifying the issue and determining the root cause, e.g. process vs. culture;
  • Improving controls and forward fixes to prevent future occurrence.
  1. Driving fair outcomes for customers via a treatment approach
  • Clarifying customer impact and deciding the conditions under which to remediate;
  • Proposed solutions should put the customer back in a position where he/she would have been had the issue not occurred;
  • Leveraging industry popular practices for review and redress methodologies, including customer contact strategies that strengthen customer responses and support fair decisions.
  1. Leveraging data and clear business rules to identify the right customers to remediate
  • Translating RCA learnings and proposed treatments into clear business rules;
  • Determining which customers are impacted via smart data analysis;
  • Establishing treatments for data gaps; taking steps so legacy products and long-standing customers are also fairly considered;
  • Testing and auditing the business rules and resulting sizing of a remediation to deliver a “right first time” outcome for the customer population.
  1. Incentivising and delivering fair outcomes for customers through a focus on quality
  • Taking steps so the operations supporting a remediation have the right culture to create fair outcomes for customers;4
  • Designing processes which drive the right customer outcomes and which favour the customer where information gaps arise;
  • Delivering operational outcomes through effective quality checking and reliable MI (management information).
  1. Having the right reporting, controls and reconciliations in place
  • Delivering reporting to the regulator and to executive stakeholders, which effectively monitor the integrated process while highlighting the right customer benefit metrics;
  • Guaranteeing key customer-facing processes, such as payments, are monitored and reconciled effectively;
  • Capturing lessons learned and considering how and where these can be applied throughout the business.

Remediation is becoming part of “business as usual” for firms. Leveraging key learnings from past programmes to deliver efficient and effective remediation, from the perspective of both financial institutions and customers, can help firms build trust with the regulator and with the impacted individuals. Executing effective remediation, with rapid and seamless customer interactions, can create an excellent opportunity for a positive customer experience.

References

  1. “Financial Conduct Authority Business Plan 2016/2017.” Access at: https://www.fca.org.uk/static/documents/corporate/business-plan-2016-17.pdf
  2. “Fair treatment of customers,” Financial Conduct Authority, June 21, 2016. Access at: https://www.the-fca.org.uk/firms/fair-treatment-customers
  3. “The top 10 retail banking scandals: 50 billion reasons why shareholders must play a greater role in changing bank culture,” New City Agenda, November 2014. Access at: http://newcityagenda.co.uk/the-top-10-retail-banking-scandals-50-billion-reasons-why-shareholders-must-play-a-greater-role-in-changing-bank-culture/
  4. “Fair treatment of customers,” Financial Conduct Authority, June 21, 2016. Access at: https://www.the-fca.org.uk/firms/fair-treatment-customers

Submit a Comment

Your email address will not be published. Required fields are marked *