Penalties Or Profits?

The rules of the game have changed. Financial customers are not adequately protected in South Africa which is why government is taking steps to transform the financial sector through a dedicated market conduct regulator. The new dispensation is currently being finalised and the countdown to 2017, when it will be enacted, has started. For the financial sector it means that in the near future delivering good customer outcomes across all stages of the product and business life cycle is not only a wise choice but the only choice.

The newly established Market Conduct regulator will monitor and enforce the fair treatment of customers by means of two regulating bodies (also somewhat ominously known as the Twin Peaks framework):

  • Financial Sector Conduct Authority (FSCA) as the new market conduct regulator
  • Prudential Authority (PA) responsible for financial soundness within the South African Reserve Bank (Reserve Bank)

Twin Peaks

As a financial services customer the world will be a rosier place since The Financial Services Board (FSB) expects of organisations to demonstrate and prove that the core principles of Treating Customers Fairly (TCF) are ingrained in its culture and all its activities.  This means that the fair treatment of customers has to be considered, measured and tracked as well as drive ongoing enhancements. A sure step forward in giving the customer a voice that will be heard.

On the other hand, the financial services business that are slow to transform will be liable for harsh penalties, fines and even withdrawal or suspension of trading licenses for transgressors. The Regulator is also set on the naming and shaming of errant firms, the reputational damage thereof dwarfing monetary penalties. Read Penalties Article.

We are at a point in S.A. business history where financial service providers need to choose between grudgingly complying or jumping at the opportunity of a synergistic solution that brings together sound customer principles, regulatory requirements and company strategies.

Which of these choices will lead to profitability for the business in question? And while the answer to this question might be obvious, the road to achieving this ideal state is not as straight-forward. Taking the lead in charting the currently uncharted landscape - Customer Experience Doyen, Prof. Adré Schreuder joined forces with Financial Services Stalwart, Ineke Prinsloo to turn compliance into sustainable value for the business that chooses to partner with them.

There are clear incontestable benefits of using their integrated approach to TCF which can be unpacked as follows:

Financial Benefits

  • Lower probability of penalties due to compliance to Regulatory requirements.
  • Increased sustainable profits through solid customer management practices.
  • Reduction in cost to serve due to efficiencies and customer knowledge.
  • Reduction in time spent by executive managers to compile portfolio of evidence for site visits from the Regulator (all reports to be generated through a management dashboard).
  • All information pertaining to customer management is housed within one system and displayed in one place.

Customer Benefits

  • Excellent service standards.
  • Top brand experience.
  • Products and service tailored to their needs.
  • Consistent after sales service.
  • Being at the heat of the company’s strategy.

Compliance Benefits

  • Full TCF compliance on Regulator’s standards.
  • Compliance to the Protection of Personal Information (POPI) act, which further enhances customer trust in the brand.
  • Know your Customer (KYC) compliance to ensure customer understanding.

Certification Benefits

  • The International Standard for Service Excellence (TISSE) certification is included, and valid for 1-year. This is audited and accredited by the British Standards Institute (BSI).

Strategic Benefits

  • Customer-centricity benchmarking to over 1,500 companies world-wide through SCHEMA.
  • Customer satisfaction benchmarking to local as well as international competitors through the South African Customer Satisfaction Index (SAcsi), a licensed product from the American Customer Satisfaction Index (ACSI).
  • Service excellence benchmarking through The International Council for Service Excellence (TICSE).
  • Intimate customer knowledge on all components influencing their experience: policies, people, premises, products, and processes.

An FSP (or any other organisation) in need of their advice will be guided through a process consisting of three steps.

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Are you confident that your business have implemented fair customer conduct practices across, and that it is experienced that way by the customer? If you hesitated, even only slightly, then you need to contact Adré (adre@consulta.co.za) or Ineke (ineke.prinsloo@dailconsulting.com) for a discussion.”