Top Tips for Treating Customers Fairly MI
12th March 2008
With the March MI deadline fast approaching, firms are frantically pulling together their Treating Customers Fairly (TCF) MI suites. Huntswood, a professional services firm providing specialist resources and consulting solutions to the UK financial services industry, has seen some firms focusing their efforts on creating a suite containing real data, while other firms are testing whether this new business tool supports their decision-making processes.
The one constant thing across all firms is the set of questions the FSA will be expecting them to answer in their thematic visits.
Examples of these are: What are your TCF responsibilities? How did you assess your MI suite to give senior management confidence that they have the right information to determine whether the firm is delivering TCF? Have you evaluated the quality of your TCF metrics and the aggregation and reporting process? What does fairness mean to your firm? Can you demonstrate, through your MI, that you are delivering the six outcomes? How do your measures give you confidence in your performance against these outcomes? How does your MI suite evidence that you treat customers fairly? Can you trace an issue from its source all the way through to the appropriate reporting level, given the significance of the issue through your MI?...and so on.
So what does a good TCF MI suite look like, and what can you do between now and March to best achieve it?
These have been summarised into 10 ‘Do's and Don’ts’ below, but before explaining them, there is one further key point to make. The next two months do not need to be just about data, but importantly the story that goes with it - why have you chosen the approach you have taken, what evidence do you have and how do you ensure your management board can consistently and confidently explain this?
Huntswood’s Top 10 Tips for TCF MI:
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Do not simply pull together vast amounts of available customer service and complaints data; it will not help answer the questions above.
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Do make the MI interesting to the business, as it will help it embed TCF. This means it must be interesting from a commercial perspective on both corporate and individual levels.
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Do ensure it can be used to demonstrate fair treatment of customers by linking cause and effect between the TCF effort a firm makes and customer outcomes on a product-by-product basis within the product lifecycle.
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Do aim to measure and report performance using ‘Key Fairness Indicators’ (KFIs) that are based on a clear working definition of ‘fairness’ rather than customer service or customer satisfaction measures. Although these metrics can be useful indicators of fairness if used to build part of a larger TCF picture, it is the definition of fairness which is critical to robust KFIs.
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Do make sure it is useable – people throughout the organisation should be able to use the information to understand and drive the change needed to ensure the fair treatment of customers on an ongoing basis.
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Do show how your remuneration policy can be defined by the TCF MI suite.
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Do not create a suite that is just about KFIs and statistics. Make sure you also include qualitative measures and a view on culture such as commentary on staff survey data showing the level of understanding of fairness and medium term change in advocacy scores.
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Do aggregate the suite to a single, simple and clear management summary that can give the board confidence in how they are demonstrating fairness, where issues are occurring, the status of improvement initiatives and how the culture is developing.
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Do immediately build a plan working backwards from your FSA visit date in March. What valuable data will you have and what will you be lacking? Make sure you are clear when the missing data will be available.
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Do embrace this as an opportunity to drive business improvements, reduce risk, improve customer focus and deliver commercial benefits.
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Matt Malone
Head of Transformation
Huntswood
About Huntswood
Huntswood, providers of professional services including consulting and customer services solutions, has produced a report that gives the clearest view in the industry to date of the real impact of TCF, how far the industry has actually come, why many firms are struggling with TCF and a practical approach to not only rapidly address TCF but drive lasting cultural change that will deliver competitive advantage. The details of this report are for client use only, however Huntswood is well positioned to provide informed thought-leading comment around the issues of Treating Customers Fairly and Principle-Based Regulation in general.