How technology is winning the battle on compliance and CX

Implementing a next-generation customer communications management (CCM) platform offers the potential to tackle compliance and CX issues at the same time, enhancing accurate and responsive regulatory change management and empowering optimised customer journeys and omnichannel interactions, irrespective of any limitations in legacy systems.

by Daniel Harden, Financial Services Transformation Director at Paragon Customer Communications

Compliance and CX are two of the most important challenges facing the banking sector today. Though seemingly separate, these trials are not unrelated; regulation is, after all, intended to improve CX. As financial institutions seek to tackle both simultaneously, innovative technology holds the key.

Regulation is a significant challenge for the banking sector. In addition to new and ever more stringent compliance demands, regulators are increasingly taking enforcement action against non-compliant firms. In a clear signal of its determination to ensure compliance, between 2018 and 2020, the Financial Conduct Authority doubled the amount it spent on enforcement and tripled the amount it handed out in financial penalties to over £220 million. In 2019/20 alone, it issued 203 Final Notices and secured a similar number of enforcement outcomes.

Communicating regulatory change

A prominent feature of today’s regulations is about how banks inform customers of changes to their services and the timeliness of this communication. To ensure this is done in a compliant way and that the potential for customer harm is removed, organisations need effective governance and processes in place. Regulatory change management, therefore, must be both accurate and responsive; something that for many banks means rethinking and reengineering how regulatory change is managed.

Besides avoiding enforcement, banks that improve how they notify customers of regulatory change, and the promptness of communications can enhance CX. Today’s customers not only know their regulatory rights; they also expect excellent services. Banks that deliver on both improve the quality of the customer experience. In an era where switching banks is becoming as easy and incentivised as switching energy providers, this can help firms improve customer acquisition and loyalty.

The role of technology

The latest technologies offer banks new and effective ways to improve regulatory change management, with modern systems not merely cataloguing regulatory data, but using regulatory intelligence to streamline and automate processes so they are smarter, speedier and highly efficient.

A modern and intuitive tech stack, when managed correctly, can also form a cohesive eco-system architecture that unlocks the operational efficiencies and agility that make banks faster to market and more responsive to changing market dynamics and customer needs.

Unfortunately, the internal structure of some banking organisations and the legacy IT systems many still use can raise challenges when it comes to implementing these technologies. This is particularly the case where banks have compartmentalised compliance, marketing and operations departments, each with their own siloed systems and data, and individual corporate objectives.

The latest customer communications management (CCM) systems, however, provide a synergy of innovative technologies to overcomes these challenges. Able to unify data across different departmental siloes, they provide a ‘one platform’ approach that automates workflows for sign-off through departments without banks having to experience the disruption of structural change or the internal resistance that would arise from it.

In addition, these CCM platforms enable organisations to centrally manage both inbound and outbound customer interactions, allowing the mapping of customer journeys to ensure seamless interactions and consistent messaging, while helping to prevent vulnerable customers from falling through any gaps.

Modern CCM platforms are also advantageous for banks whose existing legacy systems hinder their adoption of newer, more advanced technologies. Rather than requiring a drawn-out and costly IT infrastructure upgrade, the latest CCM platforms have been designed to seamlessly integrate with legacy systems, making it far more cost-effective and much quicker to deploy digitally transformative solutions. Not only does this accelerate a bank’s ability to improve compliance; it also benefits everyday communications, such as marketing.

Indeed, with regard to both compliance and CX, the ability of the latest CCM platforms to offer personalised and omnichannel communications means messages can be delivered via the customer’s preferred channel. Adopting such a strategy not only provides a better customer experience; it also increases the likelihood that messages containing regulatory information will be read and, where required, acted upon.

Where they are not, for example, if an email isn’t opened, this will be tracked by the CCM platform which can be configured to send a printed letter, automatically, as a backup. The tracking data also enables banks to analyse communications in order to continually optimise processes and make them more effective.

In an era when compliance and customer experience are critical to banks, innovative communications technologies are proving to be highly beneficial. They enable organisations to improve regulatory change management, achieve compliance and deliver better CX without upheaval to internal structure or IT infrastructure. This is particularly true when firms have the support of an expert team with the sector expertise and technological solutions to fully optimise their operations.