This organisation a major retail bank, operating in several markets. It is well established on its journey to customer centricity, having tracked its capabilities since 2006 using proprietary capability assessment models independently led by Peter Lavers.
This included the incorporation of Treating Customers Fairly (TCF) agenda in 2016, and Market Conduct in 2018.
Each year these assessments have:
- Trained internal staff in the principles of customer management and customer centricity
- Given internal assessors great insight into other areas of the bank
- Engaged all involved in reviewing where progress has or hasn’t been made
- Fairly and accurately accredited that progress, and constructively pinpointed capabilities that have stalled or gone backwards
- Given recommendations to capitalise on strengths, overcome the barriers and resolve the challenges
The challenge in a nutshell is ensure that the bank’s Market Conduct is about customers, not compliance – to continuously co-create, engage and evolve the programme to be relevant and impactful to the culture and operations of the bank; its stakeholders; and markets. It also has to be designed for cross-Group adoption (corporate banking, insurance, etc.).
The co-creation process to incorporate the Market Conduct agenda kicked off in Spring 2018, and the opportunity was taken to develop one combined model and assessment tool to address both the Market Conduct and customer-centred agendas (and also not losing the work done on TCF).
The co-created approach has significant benefits as the IP within the assessment tool is owned by the bank and its content is highly tailored to its own strategic objectives and Group-led compliance programme (rather than being proprietary, generic capabilities).
It has also enabled three specific business model versions to be co-created:
- Business-to-consumer (B2C), where the customer is an individual or small business
- Business-to-business (B2B), where the customer is a medium or large business
- Intermediated, where the end-customer buys the financial product or service through a third party
This enabled the whole of the bank to be assessed against a consistent model – a first for the bank – and enabled the other countries to be concurrently assessed.
The regulator has stated that the approach that providers take to Market Conduct should be:
- Pre-emptive and proactive
- Risk-based and proportionate
- Comprehensive and consistent
- Intensive and intrusive
These were adopted as “guiding principles” for co-creation in the first half of 2018, which took into account thorough research of the practices and conduct in all the countries where Market Conduct legislation is in effect.
The co-creation phase developed a model to depict the business system of managing the client experience through good market conduct, with scored sections and sub-sections that are consistent for all 3 business model versions.
Individual good customer management and market conduct practices then sit in the sub-sections, each with a weighting in-built in the software. These weightings were also co-created to reflect what the bank will need to excel in to:
- Help it meet its strategic objectives in the right way
- Avoid regulator sanction (if found to be lacking)
Every practice was weighted accordingly, resulting in the sections having different weightings (and hence impact on the overall score).
The principal objective of the programme is to deliver a fair and accurate assessment of the current deployment situation of Market Conduct, achieved via a co-created, transparent and repeatable methodology.
Over twenty internal assessors from across the bank are selected and trained/retrained prior to each year’s deployment. It is stressed to the team that we’re not trying to ‘pick holes’ or ‘find fault’, and internal assessors do not assess their own departments/responsibilities (i.e. mark their own homework).
Interviewing is undertaken each quarter, covering different aspects of the model and engaging a cross section of staff in the areas most relevant to them.
Interviewers’ notes and evidence logged are published and stored for utter transparency.
The scoring is achieved in workshops with all the assessors reunited to accredit Intention, Reality and Effect in every single practice based on the evidence submitted and comments received.
Outputs and Outcomes
The reports document the co-creation, benchmarked results, findings, and recommendations from the deployment of all versions of the model.
The scoring across models generates hundreds of thousands of data points for analysis each year. They deliver a ‘stake in the ground’ for new business units/markets, and an unprecedented 14-year customer centricity progress report for the bank.
The sub-sections are categorised into those that are already best practice; those that are work-in-progress (not yet best practice but with evidenced plans to get there); and those that require management focus to de-risk this aspect of Market Conduct or customer experience delivery.
The results, findings and recommendations are presented at board level and widely socialised to drive change and improvement.
This approach enables capability levels across the bank to be quantified in a consistent yet flexible way:
- attuned to the business model and market maturity
- tailored to the bank’s strategy and sector distinctions
- repeatable to fairly and accurately track improvement and effectiveness of execution
The bank has thus established a world-leading methodology to accredit and
track progress towards its strategic aims.
The annual programme comprises:
- Continued usage of the software tool, including evolutionary changes to aid assessment efficiency & effectiveness
- Refinement of the question sets to update, simplify and streamline the sub-sections and practices to reflect evolving best practices, new channels and media
- Phased reassessment to an agreed quarterly schedule
- Report write-up and feedback presentation for each phase of reassessment
The bank’s Chief Customer Officer said “This programme works well for us because it addresses our strategic priorities to become more customer centric and to have exemplary Market Conduct at the heart of how we do business. It’s also a smart use of resources as it has been co-created and deployed by our own people, trained and led by an expert in the field.”