“The party is over” for financial services in emerging markets

Berniece Hieckmann, Client Solutions Executive at Metropolitan.

The emerging market in SA is getting much more discerning about, and demanding of, financial services companies according to an important benchmark survey.

The second edition of Metropolitan’s Fairness Feedback survey, which assesses public perceptions of the industry’s adherence to the Treating Customers Fairly principles in emerging market segments, shows a decline in ratings on the elements of fair treatment surveyed.

The Treating Clients Fairly principles were established by the Financial Services Board (FSB) in 2011 and are there to highlight the conduct that is required of financial services providers to ensure that all consumers are treated fairly in terms of equity of treatment, appropriate products, clear information, proper advice, performance, service and pay outs.

The average industry rating for Treating Customers Fairly declined from the first survey in 2013, with the most marked drops being unreasonable barriers for clients and giving them suitable advice that takes into account their circumstances.

Berniece Hieckmann, Client Solutions Executive at Metropolitan, said the findings were good news as they demonstrated that the emerging market is waking up to its rights and becoming less tolerant of poor service; “The emerging market has traditionally been generous in its ratings and appreciation of financial services providers. This may have led to this market being seen by some as a soft arena to rush into with sub-optimal service levels, high margins and an assumption that the client was locked-in but that party seems to be coming to an end. We all need to be more considered about providing good value solutions to real needs rather than simply diversifying income streams”.

Hieckmann believes there’s a combination of reasons for this trend including the work done by both the FSB and the financial services companies themselves to educate consumers, the impact of legislation like the Consumer Protection Act and the digitisation of information which has ensured a faster spread of knowledge and client opinions. A difficult economic environment also plays a role in making clients even more careful about managing their money.

She adds that there were some clear positives for the industry; “the survey shows we are demonstrably communicating in a clearer and more accessible way than ever before and we are better at treating clients equitably, which is an important principle in the emerging market where parity of treatment is valued”.

Hieckmann says that the survey is important to Metropolitan because it benchmarks the company in terms of competitors and as an industry; “we use it to ensure that our business is aligned with the principles of client-centricity which we take very seriously”.

The survey also helped inform Metropolitan’s service upgrades such as an increase in the number of branches, proactive paperless claims to reduce waiting times on pay outs, clear and transparent product guides and the recently launched funeral life event manager and augmented reality app.