Treating Customers Fairly Workshop

Part 2 - AC Contribution

KEY RISK AREAS 1.  Senior Management Commitment, Strategy & Progress

2.  Product Design & Governance

3.  Marketing & Promotion

4.  Sales & Advice

5.  After-Sales Service & Claims

6.  Complaints Handling

7.  Culture & Reward

8.  Strategic Change

9.  Relationship with Product Providers and Intermediaries

10. Management Information

Non-Compliance indicators

Non-compliance indicators – Senior Management Commitment, Strategy & Progress

•  No indication of senior management discussion. •  No TCF strategy or reflection of TCF in customer strategy. •  No analysis of how well the firm has met TCF. •  No plan to address TCF. •  No TCF KPIs or reporting TCF to senior management.

Non-compliance indicators – Product Design & Governance

•  No definition of target market. •  Actual sales volume very different to predicted sales volume. •  High proportion of sales to customers outside target market. •  High volume of complaints. •  Poor persistency. •  High proportion of claims turned down or reduced. •  High volume technical queries from marketing / sales people. •  Large number re-writes required of literature. •  Very short product development lead time. •  Lessons from complaints not fed back into product design

Non-compliance indicators – Marketing & Promotion

•  No testing of customer understanding. •  High volume of complaints. •  High volume technical queries from marketing / sales people. •  Poor persistency. •  Complex products being sold through direct or non-advice channels. •  No technical training for marketing or sales people. •  Poor technical expertise in marketing and sales areas. •  No clear indication on product literature who the product is suitable for.

Non-compliance indicators – Sales & Advice

•  No technical training or literature for sales people.

•  Poor technical expertise in sales areas.

•  High volume of complaints. •  High proportion sales based on

small proportion of products out of a larger product range.

•  Large product range being supported by each advisor.

Non-compliance indicators – After-Sales Service & Claims

•  High volume of complaints. •  No regular communication with

customers. •  Lack of defined service standards for

servicing tasks or no monitoring of achieving service standards.

•  High proportion of claims turned down or reduced.

•  Payment of maturing or redeemed policies not timely.

•  Claims expectations are not outlined in policy literature sent to clients.

Non-compliance indicators – Complaints Handling

•  Complaints management information (MI) not consolidated and reported to senior management.

•  High proportion complaints referred to the Ombudsman and customer complaint upheld.

•  Low volume of complaints recorded or poor record keeping

•  Remuneration based on volume of complaints handled.

•  No process for root-cause analysis of complaints.

•  Poor record keeping •  No, or unclear, division of responsibility

between those who may have caused the complaint and those who investigate it.

Non-compliance indicators – Culture & Reward

•  Target setting and rewards for sales and non-sales staff do not reflect TCF principles.

•  Bonus and incentive schemes for senior executives and directors do not support TCF principles.

•  Incentives for outsourced providers do not support TCF principles. •  Factors that can influence behaviour do not support TCF principles (e.g.

growth strategies, disciplinary procedures). •  TCF issues not reflected in ongoing or induction training. •  Implications and requirements for TCF not translated into what it means for

each department or staff role.

Non-compliance indicators – Strategic Change

•  No assessment of impact on customers or fairness in developing or approving business cases.

•  Not monitoring impact on customer service KPIs or SLAs during or after a change programme.

•  High volume of complaints related to a specific strategic change.

Non-compliance indicators – Relationship with Product Providers

and Intermediaries •  No assessment of impact on customers or fairness in developing or

approving business cases.

•  Not monitoring impact on customer service KPIs or SLAs during or after a change programme.

•  High volume of complaints related to a specific strategic change.

Non-compliance indicators – Management Information

•  No clear KPIs identified to assess TCF effectiveness and progress.

•  MI not sufficient to assess TCF effectiveness and performance.

•  MI not shared across the business.

•  Appropriate MI not available to key audiences (e.g. Board, Senior Exec, Business Unit Execs).

•  MI not reviewed to assess effectiveness of TCF strategy nor used to guide decisions.

The Three Phases of TCF

Phase 1 The Gap Analysis

Phase 2 Implementation

Phase 3 Monitoring

Where you are and what needs to be done

Formalise and introduce procedures then train management and staff

On-going review of progress

The GAP Analysis

Phase 1 – The GAP Analysis

•  A gap analysis is the comparison of actual performance with potential performance.

•  In respect of TCF, it will identify gaps between the optimized approach to the way the business should consider their customers and the way they are being considered (and treated) at present.

•  It will, as a natural consequence, reveal the areas that must be improved.

•  In effect, the TCF gap analysis is a formal study of what a business is doing currently and where it needs to go in the future. Consequently it will have to embrace, inter alia, the following areas of business

1. Management Culture

2. Business Direction

3. Business Processes

4. Information technology

Phase 1 – The GAP Analysis

The AC GAP Analysis Report

Executive overview

Outcome 1

Implementation Phase 2 -

Phase 2 – Implementation

The two golden rules:

1.Get all Staff Involved – not just Management

2. Invest in Training

The AC Analysis and Implementation Tool

Executive overview

Outcome 1

Monitoring Phase 3 -

Phase 3 – Monitoring

You can’t manage what you don’t measure!

Monitoring should be carried out by a selected champion, preferably one who is independent, to avoid conflicts of interest and ensure objectivity and consistency in approach

Treating Customers Fairly Workshop

Presentation and graphics designed by www.dungbeetlecs.co.za