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Barriers to change and the TCF Implementation process

01 November 2012 Phil Billingham, The TCF Partnership

Outcome 6 of the Treating Customers Fairly (TCF) regime requires that “customers do not face unreasonable post-sale barriers to change product, switch provider, submit a claim or make a complaint”. It is not as simple as it sounds.

Why would we place ‘unreasonable’ barriers on our clients? As we consider Outcome 6 we immediately stumble upon a problem. The word ‘unreasonable’ is such a subjective word. What seems reasonable to a Financial Services Provider (FSP) may not be so to its clients. The reason is that we interpret things differently depending on which side of the ‘fence’ we are standing.

Beware of assumptions

FSPs tend to see things their way. We assume that clients know they must follow our rules and procedures. But clients have no idea what these rules are, nor do they care. They are wrapped up in their own stresses and pressures when they conduct business with us.

TCF requires that we have good guidelines in place to manage the process when our relationship with clients comes to an end whether the client wants to surrender, transfer away, make a claim or lay a complaint.

Key points to consider

A key consideration here is that someone senior has looked at the procedures and processes that have developed over the years and asks the tough questions… Are the current processes and rules:

1. Still required?
2. Fair to all of our clients?
3. Designed to offer a commercial or legal benefit that cannot be worked around?
4. Understood by all relevant staff, including whether they can be flexibly applied?
5. As simple as possible?

We should also consider whether our product designs accommodate simpler rules and processes to begin with. There is no simple "tick box” approach to Outcome 6.

The TCF "looking glass”

Senior managers will have to trust both staff and clients more than they have done in the past. The bottom line is that Outcome 6 is a cultural outcome. It is about looking at our rules and processes with fresh eyes, through a TCF cultural ‘prism’. You will have to empower, train and manage staff to succeed.

The Financial Services Board (FSB) Pilot study suggests that working on service standards will be a major first step towards achieving this outcome. And that brings us to the implementation part of TCF.

Get cracking in 2013

You must take the following actions during 2013 to ensure you achieve the 2014 TCF deadline.

1. Define ‘what good looks like’. Someone competent must look at each of your business processes and separate out ‘what good looks like’ for each one.

2. Carry out a GAP Analysis. You must determine how closely you conform to the standards you have designed? The key here is that this must feed into action. The FSB’s new GAP Analysis is a good place to start, though it will require some personalisation.

3. You need to start communicating your project plan and strategy to staff, clients and other stakeholders including brokers and intermediaries.

4. This is a two way process, so be sure to ask for stakeholders’ thoughts and input? In many cases they will be closer to the issues and concerns raised by clients.

5. Your processes are as strong as the weakest link. If you deal through intermediaries you must consider what their TCF process looks like. If you are an intermediary, then what does the provider’s process look like? And how does it affect your clients?

6. Training is going to be a key part of implementation, so be sure to plan for this.

7. Consider getting an independent ‘view’ to challenge convention and help move things along.

Focus for the win!

TCF is going to affect all of our businesses and the changes will be profound and far reaching. There is a clear ‘first mover’ advantage to be had. Firms that embrace the required changes will definitely have a commercial ‘edge’. The winners will be those firms with clear vision, strong leadership and a client-focused approach.

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