With the Financial Services Authority’s (FSA) ‘Treating Customers Fairly’ (TCF) – towards fair outcomes for consumers – generating many column inches of comment, the industry’s approach to customer engagement is once again under the spotlight. However, a recent survey by the Association of Mortgage Intermediaries (AMI) revealed that 47 per cent of its members feel their biggest difficulty is keeping abreast of regulatory changes; a timely reminder of the delicate balancing act facing advisers and providers alike.
The governing principles of TCF are fundamental to all our business practices; to ensure consumers receive fair treatment and that their interests are considered at every stage. The implications of this are far-reaching, from the way you advertise your services and make the initial appointment, to the service you offer post-sale. From the providers’ point of view, our responsibilities dovetail with those of yours as an intermediary. We must ensure the support we offer to you and your customers adheres to the regulator’s TCF guidelines, from product design to the service channels that underpin them.
TCF online
In the online world, the TCF current flows right through to websites and e-business channels. Our core e-services are designed for intermediaries to submit and track new business, and service existing business. Ensuring this channel exemplifies TCF principles presents us with interesting opportunities. In an industry where consumers deserve and expect fair treatment and flexibility in their financial planning, choice must be available through technology. In the mortgage market particularly, we need to accommodate a greater degree of flexibility as consumers are often governed by factors outside of their control, resulting in a risk of inadequate cover.
Technology is the ideal enabler for this type of flexibility. We have recently upgraded our online underwriting system to enable intermediaries to amend protection applications even after the policies have started. Brokers can now log back into original electronic applications and edit them, submitting changes without having to re-key information from scratch. Previously they would have had to request such updates by phone or post.
Flexibility for customers
This is great news for intermediaries who want to streamline their administration and have greater control over the new business process. But what does it mean for the customer and how does it support TCF? Not only can the intermediary update a client’s personal and payment details such as their address, bank account or payment date at any time during the life of the policy, but also change plan details. Changes to an application such as health details, start date, sum assured and term can be made within 90 days of the policy going live. This facilitates smoother synergy between mortgage terms and start date, and level and commencement of protection cover.
On average, we receive 30,000 policy change requests each year. As a result of the eSelect update facility, changes submitted electronically will tend to be processed more quickly than those requested offline as there is much less manual involvement, ensuring that we can be more responsive to customers’ needs and changing circumstances. In addition, it can reduce the risk of non-disclosure, as intermediaries can easily amend original answers to medical questions within 90 days if the client later realises they have not declared a relevant condition.
A common sense approach
Using technology can assist the collation of management information, as online services – particularly when used in conjunction with a firm’s contact history system – offer an effective audit trail of client engagement. A system enhancement such as the update facility is driven by common sense but brings about a host of benefits for the customer, broker and provider.
In its essence, TCF can be seen as good business practice and common sense too, rather than another piece of regulation for AMI’s member brokers to grapple with. As discussions about TCF rumble on, what is certain is that technology can play an important part in supporting customer choice and fair treatment.
