How will Covid19 change remediation risk?

Our sister company TCC give us the lowdown on what Coronavirus means from a compliance perspective and what remediation risks it could exacerbate for retail banks
Our sister company TCC give us the low down on what Coronavirus means from a compliance perspective and what remediation risks it could exacerbate for retail banks

Dissatisfied customers are the ultimate test for your staff, and the policies and procedures that support them in their day-to-day roles. In our 20 years helping firms manage conduct risk, we’ve seen businesses sink or swim based on how their remediation and complaint handling teams deliver customer outcomes. Perfecting your approach and enabling your staff to handle complaints well will set your business up for sustained success.

Covid-19 has put extra, unwelcome pressure on the market and consumer finances. Combine market volatility and financial insecurity with increased customer vulnerability, and you have yourself a perfect complaints storm. So while some issues might not necessarily have come to light in a normal climate, it’s likely that you’ll see an uptick of complaints in the wake of Covid-19.

Understanding where your risks are now will help you take the right steps towards reducing complaints, now and in the future. What’s more, you’ll be better prepared to handle them properly when they do arise, meaning fewer FOS escalations and less chance of FCA enforcement.  

So, do you know what risks are coming down the line, and what can you do to avoid them?

The role of vulnerability

At this time, many of your customers are dealing with job insecurity; some with loss of income all together. They may well have had their claims against their Income Protection policy rejected, only now discovering it doesn’t cover redundancy – another knockout blow to an already stressful situation. And ultimately, customers in distressed situations will often feel backed into a corner, so are more likely to raise a complaint or seek redress.

How the FOS determine what a ‘fair and reasonable’ outcome of a complaint remains to be seen and could easily change. But inevitably, the spike in vulnerability will impact the stance taken by both the ombudsman and the regulator.

While the FCA is currently showing some leniency around the 8 week deadline for a final response, this is far from a get out of jail free card. And if anything, the FOS is likely to take a more sympathetic approach. Expect them to pay extra attention to how the customer was treated, and whether the individual’s circumstances were taken into account. It’d be wise to update your vulnerability policy and make sure it’s kept front and centre at every customer touchpoint – before, during and after a complaint is raised. Over at TCC, we talk about how that can be done.

Review your forbearance policy

While the FCA and the Government have granted another three months of payment holidays for mortgage customers under financial duress, these temporary measures still have an expiry date. Firms will need to consider how they manage the transition.

Review your forbearance policies in preparation, keeping in mind that in certain circumstances, extended or unlimited forbearance is unlikely to bring about good customer outcomes in itself. Any policy update should take into account that treating your customers fairly and meeting the needs of shareholders is a delicate balance.

Leverage data

While most government measures have been welcomed, consumers that are struggling financially could still complain that the mortgage was unaffordable or there was a lack of risk warnings.

Now’s the time to use innovative tech and data analytics to your advantage. Compliance-driven analytics tools like Recordsure can tell you exactly what’s being discussed during a customer call, helping you to spot complaints as they emerge. Similarly, we use this kind of advanced technology for our high-performance assurance, using data to quickly identify themes and duplicates in the complaint handling process. Get on the front foot by using this MI intelligently – tracking the trends in complaints, and allocating and training your resource accordingly.

Prepare for the worst

In these uncertain times we should all be hoping for the best, but still planning for the worst. So, make sure you’ve got enough resource to handle complaints properly and efficiently to avoid costly FOS escalations. Re-deploying and upskilling existing staff can give your complaints management and customer support functions more flexibility and resilience during this challenging time.  Alternatively, give your team a boost with temporary resource or consider outsourcing for an effective solution which doesn’t take away from activities elsewhere in the business.

Equally, when you’re dealing with a higher than normal case load, you need ultimate speed and accuracy. Innovative tools like Recordsure make this possible, but if you are looking for a fully managed service, our high-performance remediation solution supercharges traditional file review processes, combining smart population selection and an improved audit trail to make things quicker. This means less time-consuming admin for reviewers, and a faster outcome for your customers. 

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