LENDING & CREDIT | Contributed Content, Malaysia
Stephen Rosling

What Asian banks need to know about customers' trust and fair treatment (Part 4)


In the fourth and final part of a special series of reports regarding conduct risk consumer protection regulations, we focus on some of the tactical implementation activities that will be required to demonstrate commitment to the fair treatment of customers.

It’s worth noting from the outset, that these activities should cut across the whole organisation:

Product Design - Product Development – Marketing - Sales & Advice - Customer Service/Maintenance - Claims/Maturity - Complaints

So, how do you ‘break the ice?’ 

You first need to assess the existing culture in the organisation by arranging for a cultural and regulatory audit. If you’re organisation has a TCF or conduct risk policy or regulatory guidelines to follow, this should be quite straightforward, but what should the approach be?

To be able to measure future progress, you need first to talk to people to understand where the business is now. You need to get a complete picture by talking to a sample of people across all the organisation’s functions and hierarchies.  You should also attend relevant meetings, listen in to some customer telephone calls, and spend some time in each department to get a sense of how well customers are being treated.

You also need to look at the governance structures and the processes that people are using that could affect customers directly and indirectly.  

This deep and broad audit will provide plenty of valuable data to analyse. This can then be used to develop and roll out a programme of action to improve the relevant governance structures.

Let’s look at some examples.  

Example 1 - Training

The key features of an effective TCF training course might include the following:

•      Mandatory attendance for all staff including the CEO and Directors.

•      “Face to face” delivery via a ½ day workshop.

•      Training is an annual mandatory event. 

•      The course includes an exam – attendees who fail the exam must re-take.

•      Courses are delivered at both head office and regional branches.

•      Courses are delivered in all the languages the organization uses.

•      Board members also attend  

Some of the key messages might include:

·         Getting the balance right between commercial and customer needs

·         Understanding the difference between customer satisfaction and TCF

·         The alignment of TCF to corporate values.

Example 2 – Customer Letters.

In this project, all customer letters would be reviewed for clarity and simplicity – this should include looking at:

•      Tone

•      Language

•      Writing style

•      Layout and presentation

•      Grammar and punctuation

Example 3 – Management Information

The key features of an effective suite of TCF MI might include:

•      A 12th month rolling report that enables the business to more easily identify trends and patterns

•      As well as regular monthly reporting to the senior management team and Executive, the Board might also receive a summary report.

•      A good mix of qualitative and quantitative data, plus an appropriate balance of internal and external data

•      All measures aligned to the principles of TCF

•      A balanced combination of new and existing measures

•      A highly visual report with and commentary provided by Senior Management

•      An “action” oriented report.

The MI must address in part, one of the most fundamental questions relating to the fair treatment of customers – that of being able to prove to yourself, your business, and your stakeholders, that customer are being treated fairly.

When implemented as part of broad programme of activities, firms can significantly reduce the risk of breaching regulations, reduce the risk of a regulatory penalty, and, perhaps most importantly, can enhance their reputation with their customers and shareholders

This brings to an end this short series on the history, implementation, and value of TCF regulations but I would like to finish with some concluding thoughts:  

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.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.

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Stephen Rosling

Stephen Rosling

Stephen Rosling is Co-Founder and Director of TCF Matters, a new international training and consultancy firm specialising in the audit and implementation of consumer protection regulations. He has worked in the financial services sector for over 25 years.

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