Compliance and customer experience: It’s not a trade-off

Consumers today are used to smooth, instant transactions made in real time and free from the lengthy wait times previously endured when making a trip to the bank. Improving the customer journey is now a main focus for banking leaders and 51% of organisations worldwide cite “improving the customer experience” as one of their top priorities. Product experience has become a deciding factor when choosing financial services providers, especially for digital natives for whom online purchases are second nature. In most sectors, it has become imperative for businesses to pivot their customer-facing processes to meet the expectations of this demographic, with some sectors adapting quicker than others. However, highly regulated industries such as finance, banking, and insurance have moved slower when it comes to developing services that offer a seamless online customer experience, with only 37% of organisations having a formal CX plan. This is due in part to the inherent challenges these sectors face in terms of red tape. Meanwhile, disruptive business models such as fintech and challenger banks have the ability to deliver the same services quickly and effectively, attracting digital natives and snatching market share from old-school players.

The message seems simple on paper. Having a more agile approach towards customer experience is vital to remain relevant for the growing group of potential customers that have little wish to conduct business with pen and paper. However, there are some significant challenges associated with this.

Tighter regulations and penalties for non-compliance, along with a sharp rise in online financial fraud during the pandemic, have made it more important than ever to safeguard existing processes. And yet, some businesses are still not prioritising a smooth digital user experience, despite the clear consequence of losing existing and prospective customers.

The solution to this starts with a change in mindset. The realisation that compliance and customer experience are not at odds, but in fact they coexist quite successfully.

Adopting a different approach

The first step is to understand that your company culture is expressed through technology – your digital customer touchpoints. This means aligning compliance-related aspects of your customer interactions with a customer-centric culture. It was reported by the FCA that only 36% of consumers see financial firms as ‘honest and transparent’ in their dealings with them. As an example, to build trust and loyalty among customers when performing background checks for loans, if you explain in simple language why certain information is required – it will foster confidence that their personal data is safe with you. And it’s important that you apply this approach consistently across your entire offering. Rather than being a regulation-fuelled roadblock to customer satisfaction, due diligence can be a way to show that a business cares for its customers and their wellbeing.

Second, a common mistake is to attempt to digitalise everything at once. There is no shame in identifying low-hanging fruit first to benefit from quick wins and then build from there. One starting point could be to implement automated data lookups to publicly-available company information, which verifies who has the right to sign an agreement on behalf of the company doing business with you. It is a simple yet powerful way to automate the slow, manual process of collecting physical agreements and chasing down the right people.

Then, once this piece is in place, businesses can take it further by implementing an e-signing solution that makes it possible to get the agreement signed by all parties within the same digital workflow. This helps get an experienced partner on board who has both the necessary know-how, as well as the technology in place.

Bridging the gap between compliance and experience

Businesses often forget that digital transformation is as much about mindset as it is about technology. For highly regulated industries, the first step is to view compliance as a business enabler rather than a hindrance, and to understand that with the right approach, you can make your back office operations more secure and efficient while enhancing customer satisfaction. Recognising that customer experience and compliance are not at odds is a key step in becoming more competitive in an increasingly disrupted industry. While the road forward may require changes in investment and how we design and implement business processes, success does not necessarily depend on expensive, long-term IT projects, just as a smoother customer experience relies on much more than purely technical solutions.

Tage Borg, CTO, Scrive