It feels like just five minutes ago that building societies and the wider financial services market were working to get ready for Consumer Duty regulation. Requiring a dramatic transformation of the customer journey and far greater transparency, ensuring compliance with the new principles took a monumental effort.

It feels like just five minutes ago that building societies and the wider financial services market were scrambling to get ready for Consumer Duty regulation. Requiring a dramatic transformation of the customer journey and far greater transparency, ensuring compliance with the new principles took a monumental effort.

While the end result has delivered good outcomes for building societies, banks, and their customers, getting the foundations in place required a steep learning curve for many. Then, as things settled down, the new UK Data Protection and Digital Information (DPDI) bill appeared on the horizon, aimed at strengthening privacy and data post-Brexit.

Though DPDI has for now disappeared from sight again, with parliament running out of time to get it over the line before the election, it is likely some clauses will be revived under the new government.

Now, we’re not planning to get into the intricacies of DPDI’s appearance and abandonment here, but it is worth highlighting as yet another example of the communications regulation rollercoaster facing building societies and the wider retail financial services market. So how can organisations smooth out the bumps?

The wider benefits of communications agility
 

We argue that maintaining speed of response is the number one way to keep the regulator happy and for staying ahead of the curve when compliance requirements keep changing. This is particularly true in the financial services market, where there are often tight deadlines to conform to new regulation and the penalties for failure can be substantial.

Improving agility and speed of response when it comes to customer communications comes with some other important advantages. Think about when the Bank of England changes the base rate.

Ordinarily, these costs will be passed on to consumers through a hike interest rates. To stay compliant, any change will need to be communicated to customers well in advance of implementation, putting banks and building societies on the clock.

Once an organisation has established whether or how it wants to pass on charges, the marketing team will need to draft communications to affected customers – informing them of rate changes to their savings account or mortgage.

However, with rate changes varying depending on the account time or product, segmenting customers isn’t easy without robust management information and data rules and parameters. At the same time, maintaining consistency is almost impossible without standardised, centralised processes. Then when it comes to signing off communications, maintaining content consistency and auditability can quickly fail without a single point of control.

All this is to say, with traditional, often fragmented legacy systems, it is a mammoth task to segment a customer base, adapt messaging, test the output and embark on a full book mailing. And today, in an age of Consumer Duty and other regulation, it is easier than ever for delays to result in organisations falling foul of the regulator.

Building in agility and speed of response with digital transformation
 

Digital transformation, done right, can build in the agility and speed of response necessary to survive the regulatory rollercoaster and deliver exceptional customer communications. By automating manual tasks, implementing digital workflows, and digitising paper-based processes, businesses can reduce errors, minimise delays and increase speed of response.

Crucially, digitisation can also provide real-time, data-based insights that allow for more informed decisions, and speed up the launch of new products and services.

The caveat to all this is that digital transformation can falter if organisations get too caught up in rolling out the latest tech, without thinking about how these integrate across the legacy tech stack. This leads to the predictable end of siloed systems and fragmented data – neither of which deliver agility.

The priority whenever embarking on a digital transformation journey is to think about removing complexity, consolidating data sources and ideally, working from a single system that integrates old legacy platforms.

Find out more
 

At Paragon, we specialise in using the latest technology to create new, or modify existing, processes to meet changing business, market, and regulatory requirements quickly, safely and efficiently. We are also members of both UK Finance and the Building Societies Association (BSA), which gives us and our clients early insight around upcoming regulatory changes and policy thinking – essential in today’s fast changing landscape.

To learn more about the themes and topics covered in this article, visit: https://www.paragon.world/en-gb