In June, the Financial Services Authority (FSA) published the review of the Insurance Conduct of Business Sourcebook. It identified significant failures in oral disclosures during calls via the telephone of protection contracts, in particular critical illness cover (CIC).
The FSA commissioned two consumer research projects in 2008 and 2009 examining the consumer experience of purchasing CIC, based on the views of over 1,000 consumers that had recently purchased CIC.
It also carried out a call listening exercise of 11 firms selling CIC. The FSA judged that overall compliance was unacceptable, and all of the 11 firms failed on some or most of its key requirements in the majority of their calls.
The FSA has become increasingly agitated about firms failure to provide adequate information to consumers at the point of sale concerning both the product that they purchase and the service that they receive. Telephone sales involve a large oral component and the FSAs concern is that a significant proportion of sales either omit key disclosures altogether or deliver them in a way that prevents consumers forming a realistic understanding of the products they are purchasing.
Now, through a “Dear Compliance Officer” letter issued on the 29 November 2010 to all firms selling protection contracts, the FSA has mandated that all firms review their processes and controls to ensure compliance at the point of sale by 29 May 2011. Firms that sell protection contracts via the phone either have to confirm they have completed any remedial actions required or produce an action plan stating when these actions will be completed.
This deadline gives firms a relatively tight timeline in which to respond to the FSA. During this time they need to review all aspects of their:
· Sales process
· Attendant systems and controls (e.g. Monitoring, Supervision, Training and Competence, Reward)
· Management Information
· Customer outcomes delivered
However, process design and process errors are only part of the solution within the call centre, and softer people factors are vital to ensuring that staff:
A) Understand the process
B) Understand why compliance and adherence to the process are important, and
C) Are motivated to work within the compliance framework and not to see it as a hindrance to their job or their remuneration
Changing a process doesnt automatically change the outcome, without working with the people that operate within it. In order to truly understand the real root causes of any poor customer outcomes, firms need to assess the impact of these cultural factors and include appropriate action in their remediation plans to address any deficiencies identified.
The requirement to review systems and controls presents an opportunity for firms to refine the way in which they sell protection contracts, either by developing more streamlined and customer centric processes or by better equipping and motivating staff to follow the process in practice.
Many firms only look at their processes from an internal perspective.
Effective processes must be designed around the outcomes for the customer, and the call centre is ideally placed to take the lead on this. It is the call centre staff that speak to the customers every day. They know the processes that drive customers mad and cause bad customer experiences.
Therefore, they can look at the process from the right perspective and should have input at concept stage alongside marketing, IT and compliance rather than just be on the receiving end of new marketing processes and technologies.
Keith Gait, founder and principal consultant at Orchid Consulting and Will German, managing consultant at Avantage
|