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Treating Customers Fairly
(TCF):
What CEOs must know….
..to meet the challenge & reap the
reward.
Stephen Rosling
Director
Quick show of hands…
Thinking about your own organisation:
• How many have a TCF policy in place?
• How many have a role or function that is
specifically responsible for TCF?
This session will…
•Give you a clear understanding of TCF and why it
matters.
•Show you can use TCF to your advantage in
▫Building better quality business
▫Staying ahead of further consumer regulation.
The State of Trust
The State of Trust
Why does “trust” matter so much to
financial services customers?
▫ Intangible
▫ Long term
▫ Don‟t know if it‟s going to work until the point
customers desperately need it
▫ Complex products; forced purchase
Why Should Anyone Buy From
You?
Costs of Getting it Wrong..
In the US: US$25 billion on residential mortgage lending
In the US: US$445 million on unfair, deceptive, abusive acts and practices
In the UK: US$ 15 billion on miss-selling of payment protection insurance
In HK: US$ 258 million to compensate Lehman Brothers investors
(Data Source: KPMG Report Nov 2012)
The benefits of getting it right..
• Customers - US$ 23.2 billion
• Insurance industry - US$ 6 billion
• Government - US$7.4 billion
• Better customer engagement - US$1 billion
..more benefits of getting it right.
• Reputation
• Public trust
• Demonstration of commitment to social and
governance issues (Corporate Social Responsibility)
• Improved customer advocacy
“There can no longer be any doubt about the link
between protecting consumers from abusive products
and practices, and the safety and soundness of the
financial system”Chair of the US Federal Deposit Insurance Corporation
The principles of TCF -
internationalThe OECD and Financial Stability Board‟s
universal “High Level Principles on Financial
Consumer Protection” relating to TCF:
• Equitable and Fair Treatment of Consumers
• Disclosure and Transparency
• Responsible Business Conduct of Financial
Services Providers and Authorised Agents
• Complaints Handling and Redress
UK first on TCF principles • Products and services marketed and sold in the retail market are designed to meet
the needs of identified consumer groups and are targeted accordingly .
• Customers are provided with clear information and are kept appropriately informed
before, during and after the point of sale.
• Where customers receive advice, the advice is suitable and takes account of their
circumstances.
• Customers are provided with products that perform as firms have led them to
expect, and the associated service is both of an acceptable standard and as they
have been led to expect.
• Customers do not face unreasonable post-sale barriers imposed by firms to change
product, switch provider, submit a claim or make a complaint.
• Customers can be confident that they are dealing with firms where the fair treatment
of customers is central to the corporate culture .
Consumer Regulations…
Treating Customers Fairly (2008)
Retail Distribution Review
Dodd–Frank Wall Street Reform and
Consumer Protection Act
Authorisation Scheme for financial
Advisers
Treating Customers Fairly
Consumer Regulations…
OCI proposal for new Independent Insurance
Authority
Financial Advisory Industry Review
Future of Financial Advice
Financial Advisers
Act
Framework for Insurance
Advertising
Guidelines for Introduction of New Products Investment Adviser
Regulations
Building a culture of fair dealing:
the six crucial points of influence• Leadership – TCF „championed‟ by CEO
• Strategy – vision/values; customer view;
org.dev
• Decision-making –
informed, empowered, open to challenge
• Controls – define, implement, report, review
• Recruitment, Training and Competence
• Reward – reshape around quality treatment of
customers
TCF requires holistic effort along your
entire product value chain
• Product Design
• Product Development
• Marketing
• Sales
• Customer Service/Maintenance
• Claims/Maturity
• AND in all your support functions: IT, Finance
and Accounts, Change Management, Facilities.
Step 1: Regulatory & Cultural
AuditInterviews
Listening in
TCF Training TCF Employee Communication and Engagement
TCF Policy/Customer Committee TCF Escalation Processes
TCF Management Information
Product development and review processesMarketing Materials
Sales processes and documentationCustomer letters
Complaint Handling Processes
Step 2
• Analyse audit results
• Develop TCF action
programme
Best practice example 1: TCF
Training
• Mandatory attendance
• Delivery
• Annual refresher
• Exam
• Locations
• Language
• Board members
Training Messages..
Best practice example 2:
Customer Letters
• Tone – what will you say and how will you say
it?
• Language – choosing the words
• Writing style
• Layout and presentation
• Grammar and punctuation
Best practice example 3 - TCF MI
• 12-month rolling report
• Board Summary
• Qualitative and quantitative data
• Internal and external data
• Align to principles of fair treatment
• New and existing measures
• Highly visual
• Commentary provided by Senior Management
• Action oriented
TCF MI examples…
Treating Customers Fairly is NOT..
• About improving customer satisfaction
• About treating all customers in the same way
• Just about the quality of advice
• A traditional “do once & move on” project
• Only about compliance and risk management
Treating Customers Fairly IS....
• About building/restoring customer trust in
financial services companies
• About cultural change
• About everyone playing their part
• A benefit, not just a cost
• About being able to prove that you treat your
customers fairly.
“Brands must move from having nothing to
hide, to pro-actively showing and proving they
have nothing to hide” (Trendwatching.com)
“Trust grows at the speed of a coconut
tree, and falls at the speed of a coconut.”
Thank you
Contact Details
Email: stephen.rosling@tcf-
matters.com
Tel: +44 7891 438 795
Contact Details
Email: [email protected]
Tel: + 61 421 044 355