Why treating your customers fairly will be regulated by 2016

By Kammy Naidoo, Head of Busfin Consulting.

Due to the expansive role that call centres play, it’s not surprising there is increasing regulatory pressure that is borne to bear by call centres. Gone are the days where recruiting for call centre staff was more about a sound telephone manner.  Nowadays, with the increase in regulation and changing needs and demands of customers, there is a whole host of requirements employees need to meet. As a result the traditional way of managing call centres is rapidly changing.

Treating customers fairly (TCF) will be finalised in 2016 by the FSB

Within the financial sector specifically, the impact of regulation is being felt by the major changes required in order to comply. In particular, a newcomer in the regulatory space – known as Treating Customers Fairly (TCF) is likely to be finalised in 2016 by the Financial Services Board (FSB).

TCF is being introduced in SA, after being implemented in the UK over the past decade.  Its applicability extends to all companies within the financial sector.  Simply put, it requires companies to show they’re being fair to their customers.  To prove this, companies will have to demonstrate they have achieved certain defined outcomes. Requiring companies to show that fair outcomes have been achieved will force companies to move away from the tick box approach to compliance.  This has caused some nervousness in the industry, especially in light of the some of the massive fines that have been issued to companies in the UK.

6 Outcomes to prove compliance

There are 6 outcomes that affected companies must achieve in order to prove compliance.  These TCF outcomes are:

  • Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.
  • Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
  • Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
  • Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
  • Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
  • Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

How to apply TCF regulations in call centres

Significant lessons have been learnt from the UK specifically from the Financial Service Authorities who investigated the performance of a number of call centres. Some of their findings have been included in the guidance that follows.

For call centres to effectively meet the requirements of TCF, consideration must be given to the following:

  • Call centres need to have appropriate procedures in place to ensure that all customers are treated fairly. Important to note is that “customer satisfaction” and “treating customers fairly” don’t mean the same thing, hence senior management in call centres can’t rely on customer satisfaction results alone.
  • For call centres who sell products, careful attention needs to be paid to the scripting of calls and ensuring that agents provide proper disclosure of significant exclusions and unusual limitations.  It is insufficient to rely on that information being available in the terms and conditions.  If it is material to the contract, or past experience shows there is common misunderstandings or issues that relate to that, this must be carefully explained by the agent.
  • Existing data/management information must be used to alleviate problems or issues from arising and or make changes to the business. For example, if complaints data suggests that a specific agent is continuously providing inadequate information to customers, then the company needs to ensure that the agent is taken off the lines and provided with additional training before they are allowed to sell again.
  • Call centre agent performance and how it is measured needs to be redefined.  Traditionally call centre agents have been measured based on the quality assurance of calls which included adherence to scripting, phone mannerisms as well as average call handling times and number of calls taken.  This led to incentivisation to handle more calls and having lower average call handling times, without much focus on quality. A more balanced way of measuring and incentivising agents must be in place to ensure the delivery of fair outcomes.
  • If a company chooses to outsource a call centre service to a third party, it is still ultimately responsible for the conduct and actions of the outsourced call centre.  As such, the company needs to conduct an appropriate due diligence of the third party and ensure that proper controls are in place. Companies would also benefit from mystery shopping an outsourced call centre, where appropriate, to validate the quality of service delivered.
  • Remuneration models need to be carefully designed, especially where it involves sales, in order to ensure that:
    • Agents or third parties are not paid solely on the basis of volume of sales but also include a review of for example complaints data, lapsed or cancelled policies/sales;
    • Key performance indicators used to assess the service do not concentrate too heavily on achieving sales but also include a focus on quality and customer service;
    • Sales staff are not incentivised in a way which could encourage them to pressurise customers to buy the product.

These are just some areas that call centres need to focus on.  In assessing your own call centre performance, a critical review of the company’s entire value chain of activities is required in order to identify and fix the gaps.

If your company has not already done so, have a look at the self-assessment tool (https://www.fsb.co.za/Pages/Results.aspx?k=tcf) which the FSB has designed and use this to assess how your business is performing.  The tool can also be customised to your business and its needs so don’t be afraid to remove irrelevant questions or to add on more.  The self-assessment should serve as the benchmark against which you continuously assess your progress.

Key takeaway

Most importantly, remember that the intention of TCF is not to place any unnecessary burden on the business but the intent is to create good business habits that sees customers being treated fairly and that ultimately delivers value to both the customer as well as the company.

Join us for the Call Centre Conference 2015 taking place on the 25 and 26 February 2015 in Johannesburg where Rod Jones, customer experience and contact centre industry specialist will discuss how your organisation can gear-up for the future, changing landscape of the contact centre. View more information about the programme. Click here now to learn more.

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