Delivering Compliance and Robo Advice in the Digital World

Author: Andrew Stacy, Glassbox Digital

There was a time when financial services companies were required to keep a written record of customer transactions and communications for compliance purposes. Regulators operated on the premise that if it wasn’t written down then it didn’t happen. Then came the rise of the call centre and voice recording became an essential system, to capture and store customer interactions. But now the world looks very different and most companies today do not have complete records of exactly what the customer saw and did on their website.

If the regulator knocked on the door today, could you retrieve and replay in full, the exact journeys customers took with you online – as seen by the customer? If the answer is no, then keep reading.

One of the biggest challenges today is that no two customer journeys are the same.  Websites have dynamic content that is personalised to the customer and their particular circumstances. Then you have the sticky problem of knowing how this content appeared on their screen, whether it was a laptop, which browser (as this can have an impact on what’s displayed), tablet or phone.  You need to be able to recreate not only what the customer saw, but also how it appeared to them. For example, did they have the opportunity to see all of the terms & conditions before accepting the policy?

The need for online record keeping has been amplified and is being highlighted by the current publicity surrounding Robo Advice and suitability.

Following the Retail Distribution Review (RDR) a number of financial services businesses did away with their direct sales advisors and as a result obtaining financial advice in the UK is to a large extent the preserve of the relatively wealthy; but it is generally recognised that the level of financial literacy in the UK is low, and people need advice to navigate their way through the complexities of pensions, savings and investments. However, triggered by new pension freedoms announced in George Osborne’s March 2014 Budget, and the FAMR Report, Robo Advice is aiming to bridge this gap. It provides a means through which financial service providers can help customers access the information and find the products that match their needs via digital channels.

In order for financial service providers to offer such information and advice online they need to have the confidence that they have a complete record of what the customer was shown, how long the customer spent viewing the information, what questions the customer was asked and how the customer replied. And they need to be able to be able to replay those records (potentially years after the event) to prove that the customer was taken through all the requisite steps. You only need to look at how an entire industry has emerged from the PPI debacle. Then if a customer does challenge and says “I was not told that when I made the purchase”, there is not only a record of what was presented to them and how it looked on-screen, but also how long they spent on each section. Did the customer simply click through the terms & conditions, rather than reading them.  It removes the ‘he said she said’ conflict to provide a single version of the truth.

If firms have designed their customer process to meet all of the regulatory requirements recording sessions in this way, then it will enable organisations to clearly demonstrate that they are adhering to the rules.

However, regulatory compliance isn’t the only benefit to capturing every customer session. In the context of Robo Advice it can also assist in ensuring customers have understood the process they have been through and have the right product to suit their needs. For example, if a customer initially states that they have a low risk appetite but changes their mind during the process and selects a high-risk investment, this session can be flagged for a call to the customer to double-check that they are aware of the implications of their choice, thus avoiding any unwelcome ramifications for both parties.

The steps needed to deploy online recording are simple (requiring no major web integration work), fast and perhaps even more surprising, relatively low-cost to implement and manage.  The biggest obstacle is to make financial service providers aware that they are potentially at risk and that it is in fact possible to record, retrieve and replay every customers’ online session in its entirety.

 

Author: Dylan Jones

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