This series has explained how by addressing employee conduct to meet the compliance requirements of the new Banking Code of Practice (BCOP), which comes into effect in July 2019 (as well as the findings of the Royal Commission on the financial services industry), banks can simultaneously improve the customer experience and reduce conduct risk. The question remains how to put this into practice.

This revolves around three elements: getting the basics right by conducting a gap analysis to understand where the BCOP will have the biggest impact; increasing control by introducing systems to improve understanding of the compliance environment and generate deep insights from internal sources of data; and finally link to the customer experience and make regulatory-driven investments a win-win.

Getting the basics right

The first stage is conducting a gap analysis to understand the changes needed to systems, policies, processes, controls and bank collateral to comply with the BCOP by the time of its introduction on 1 July 2019. A means to do this systematically, is use the Accenture BCOP Tool. This assessment tool can map controls, risk and obligations to a bank’s value chains.

This is crucial since conduct and compliance cut across all aspects of a bank’s operations. Moving from a siloed, business-unit view to a value chain approach can make it easier for executives and business stakeholders to understand their environment, actions and accountabilities. Thinking about it from a customer journey point of view achieves the same ends: risks are mapped to a framework that provides end-to-end visibility and a consistent way of driving action, while also enabling the bank to respond faster to internal or regulatory inquiries.

Rethinking and cleaning up datapoints in the bank’s systems of record (SOR) is another basic yet crucial step. The more reliable the data, the higher the quality of insights that can be gleaned from its analysis.

Increasing control

Using such insights is fundamental since the objective should be to go beyond a reactive or historical approach, based only on data from the risk SOR, to a proactive one that spots potential problems before they arise.

Too often, the risk SOR is the start and end of current reporting. This is no longer sufficient. The risk SOR is only a small part of the data available to decision makers (as the information pyramid shows) and is received late in the customer journey; moreover, there is often no secondary source of data validating its integrity. Taking a broader approach, deep insights can be generated from internal sources of data such as complaints and remediation, customer call logs and interactions, as well as input from branch networks.

However, having collected this data, without a way to apply a single lens to the insights generated, root-cause analysis is tricky and compliance with enterprise-wide regulatory mandates like the Banking Executive Accountability regime (BEAR) or the BCOP difficult to ascertain.

What’s needed is a way to present insights from these various sources in a holistic manner, and to guide decision making. This is only possible if insights can be seen vertically, according to lines of accountability for executives across their respective value chains, as well as horizontally, evaluating compliance for the enterprise or discrete business units across a regulatory mandate or theme (such as the BEAR, BCOP, responsible lending or privacy legislation).

Linking to customer experience

As this series has explained, complying with the BCOP and other regulatory initiatives provides the opportunity to tackle conduct risk and improve the customer experience at the same time – a win-win situation. Putting this into practice means prioritising investments that improve the customer experience – which also often empower front-line staff to manage their own risks and controls.

At the root of this, as the second blog in our series explained, is human-centred design. Simply adhering to calls for more stringent controls without designing them for the humans who need to use them may increase the risk of brand erosion and disintermediation by both smaller, more nimble players and new challenger entrants such as Google LLC/Apple Inc./Facebook Inc./Alibaba Group Holding Limited-type platforms. Using human centred design for regulatory investments means never neglecting customer and employee experience.

This might sound easier said than done, but the opportunity exists to kill two birds with one stone – if banks can obtain sufficient insight into their customer journeys and understand where BCOP and customer experience intersect. Having this, and a granular understanding of how projects affect business outcomes, changes, channels and roles, allows decision makers to piggyback off existing projects to add a BCOP or customer experience element to investments that are already in progress. Accenture’s Customer Journey tool, which can visualise, track and drill down into customer journeys with considerable granularity, can provide this understanding.

Taking a holistic, data-driven and proactive approach is therefore the only way to get out in front of the challenges that banks face in today’s commercial and regulatory environment. With more competition for financial services provision, greater regulatory scrutiny and a crisis of trust in established players, there is little choice but to reinforce controls, conduct and compliance and improve the customer experience. Fortunately, as this series has shown, using innovative tools on Accenture’s Risk and Compliance Insights Platform, banks can do both at once.

Contributors to this post: Jennifer Pham, Manager, Management Consulting, Accenture; Rimon Nissan, Manager, Management Consulting, Accenture

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