The FCA says it wants firms to put their customers’ interests at the heart of what they do. That might not sound like a big change from selling financial products that comply with regulations, but it is. Firms need to make sure their customers end up with what the Financial Conduct Authority calls ‘fair outcomes’, and that it’s easy for customers to understand exactly what they’re buying. Not just the man on the street – it’s their corporate customers too.
The regulator might be driving change now but leading firms want to foster a culture that centres on the customer. Because it produces a sustainable and profitable business for the future.
The right questions
To do that, some of the many questions you’ll need to ask yourself are:
That’s a tall order. And perhaps the most difficult part is knowing what the regulator expects and how that might change – particularly as we’re all trying to anticipate which of today’s standard business practices could become tomorrow’s PPI mis-selling or Forex scandal.
Becoming genuinely customer-centric will mean refining your operating model, your strategy and your culture. You’ll need to think about every single point where your customers – and prospects – come into contact with you. That includes targeting, marketing, sales, developing new products, setting up new accounts, making payments, handling complaints, dealing with customers who leave, and managing day-to-day interactions.
Simple compliance isn’t enough. To make sure your business is sustainable, you need to take a long-term view. You need to make giving customers a great experience the centrepiece of your strategy – the thing that sets you apart from your competitors.
A major global bank asked us to help with a big three-to-five-year programme to help them know their customers better. This was in the wake of high-profile problems with local customers, and several competitors had recently got into trouble with the regulators.
We ran the programme in three phases. In the first – ‘Protect’ – we assessed whether the bank was in line with the regulations and their own policies. Over two years, we checked all their international businesses, and their processes for knowing their customers.
We’re now moving on to the next phase – ‘Align’ – where we define what needs to change, and how. It involves governance, management information, operational effectiveness and the policies and procedures for when customers leave – voluntarily or because the bank wants them to. In the final phase – ‘Implement’ – we’ll put these changes into practice, giving the bank a single view of each of its customers.
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