A revived focus on treating customers fairly
14 July 2011
When the Financial Services Authority (FSA) introduced the Treating Customers Fairly (TCF) regime two years ago, it was generally perceived as yet more regulatory red tape.
Instead of meeting resistance, Research and Insight departments in banks, life and pensions companies and investment houses embraced the change. They played a fundamental role in helping financial providers embed the regime for the betterment of the customer experience.
Putting customers first
The recession has had a massive impact on financial services providers, forcing them to make difficult commercial decisions and often causing business closures. Even through these difficult times there has been the same or an even greater focus on TCF initiatives. Our recent survey of 34 research, insight and marketing managers backs this up as the majority view.
Research and Insight departments play an important role in the provision of TCF evidence. Three quarters are involved in either collating all the data or providing it to other parts of the business.
Living and breathing TCF
There have been a number of challenges with instilling a TCF culture in the workplace. Firstly, there is the initial process of embedding and implementing it. Then the difficulty lies in educating employees and getting them to buy into TCF; particularly those who are not customer facing. Finally, the challenge lies in defining what is ‘fair’ and then designing suitable measures to report and evidence TCF.
Once these issues were tackled, there were further problems addressing communication and education on TCF approaches, getting to a ‘business as usual’ environment and ensuring there were no ongoing negative perceptions.
One Life and Pensions Insight manager commented:
“A major challenge was not creating adverse negativity towards the initiative through excessive measures, metrics, schemes and paperwork”.
Despite the size of the task involved in collecting customer Management Information (MI), only a minority have fully automated the collection of data. Surprisingly, a third of those surveyed are working with little or no automation of data collection systems at all.
There is little evidence of widespread use of specialised IT tools or systems for the collection and dissemination of TCF MI; the majority use MS Office programmes. A minority use business information tools, reporting database solutions, SharePoint, or third party TCF solutions. Most appear to have put efficient processes in place with only a small minority saying they spend too much time collating TCF information.
Measuring the impact
Market research skills continue to play a major role in collecting MI for TCF; in combination with customer service data such a complaint logging and customer in-bound calls, quantitative telephone surveys are used by the majority as a method of measuring their performance against customer fairness issues.
A research manager from one Life and Pensions company commented:
“The TCF Key Performance Indicators (KPIs) are derived by information – some of which is created by our Insight team – given we want to drive improvements to TCF then actions flow from this insight and are monitored at Exec level”.
The majority have found it easy to action or implement TCF initiatives and stakeholders have been able to easily gain insight from the TCF information collected. However, there is still divided opinion on the impact of these initiatives. Almost a third disagree that TCF measures have made a major difference to the customer experience and retention levels.
The majority thought that their TCF programme was successful and that their organisation came out of 2010 in better shape than at the start of 2009.
