Interoperability – a key requirement for managing risk


The times they are a-changing, as Bob Dylan so elegantly vocalised. And it appears now – more than ever – that things are changing more quickly and dramatically than we’ve seen before.

Staying ahead, or even remaining a part of the game, is becoming increasingly difficult for many organisations. With the regulator tightening its grip and technological advancements gaining pace, the game is changing and becoming increasingly more expensive to remain ahead of.

There is no greater long-term threat to today’s market-leading banking and financial services organisations than newcomers with sophisticated internet-based technology. Those traditional banks and financial services organisations that fail to move ahead of the times may see their market share decline dramatically.

With this in mind, what should today’s market-leading organisations be doing to stay ahead or stay competitive? The obvious choice would be to plough vast sums of capital into developing the next ground-breaking internet-based technology to beat off the competition. This new technology provides transparency, efficiency and 24/7 access – essentials for the modern consumer. However, in the short to medium-term a shift to focusing more closely on improving the consumer experience could herald fruitful gains for organisations.

Good ethics has a major part to play in improving the consumer experience. Since the 2008 financial crisis, banker bashing has become the norm. People are now looking for evidence of better moral values from financial institutions. Greater honesty, transparency and better quality are at the top of the modern consumer’s list. Consumers have greater access to financial tools and information than ever before and are becoming more knowledgeable before making life’s important financial decisions. This makes it more likely that consumers will switch more easily between organisations to reap the highest rewards or benefits available. This poses a substantial risk to banks and financial institutions in their bid to retain customers. The best way to negate this risk is to ensure employees adhere to stringent levels of ethical behaviour. The impact of good ethical behaviour on Net Promoter Scores is also a positive one, increasing the likelihood of customers recommending an organisation to friends and family.

Maintaining a good standard of ethical behaviour is aided significantly by well-designed and executed Training and Competence (T&C) schemes. After all, assessing competence is more than a matter of judging whether a person has the required qualifications to carry out their role – it’s about ensuring employees are carrying out their work in an ethical manner. It goes far beyond the skills-based ‘tick-box exercise’ it once was.

Many firms are choosing to automate their T&C schemes, but market-leading organisations are also integrating their various T&C, complaints, learning, sales quality, and testing systems to produce meaningful Management Information that can be used to better inform their decision-making. For example, a sales quality check may reveal gaps in an adviser’s skill set, which is then fed through to that adviser’s T&C program, which in turn triggers a learning management system to deploy necessary courses to improve that adviser’s skill set, thus improving competency and ultimately the consumer experience.

It is better for organisations to have useful, meaningful data available from relevant systems so that they can make predictions, assess probabilities and then prepare accordingly rather than sitting back and waiting for issues like mis-selling,

In many organisations key Management Information falls between the gaps. Many firms are simply installing silo systems to cater for their individual needs and there has been little desire so far to drive action in one system based upon event data from another system. This cross business unit ‘sharing’ is vital in improving an employee’s competence. Operating without interoperability between systems enables unethical behaviour to remain hidden and increases the risk of heavy fines from the regulator further down the line. Linking a T&C system to a sales quality system, for example, ensures that the risk of not remedying key issues is significantly reduced.

Achieving this level of interoperability requires a great deal of experience and knowledge to implement successfully. In today’s ever changing regulatory and technological world, it is still surprising to see how many companies still consider building an in-house system to manage T&C, complaints, sales quality, learning management, and the like. This typically happens when organisations believe they have both the in-house resources and the capability to build an integrated system. However, as many companies have found, building an in-house solution may give an organisation what it thought it required when the project started, but it is unlikely that will still be what the business needs when it is eventually implemented. Leading software vendors continually remain ahead of the game to ensure systems adhere to forthcoming regulations and best practice – reducing the risk of fines from the regulator.

It is better for organisations to have useful, meaningful data available from relevant systems so that they can make predictions, assess probabilities and then prepare accordingly rather than sitting back and waiting for issues like mis-selling, for example, to arise in future, which significantly reduces consumer experience and the likelihood of Net Promoter Scores decreasing.

Experience with our customers tells us that regardless of the size of their organisation, the products they sell or the way they distribute them, the overriding objective is to put the customer at the heart of everything they do and to be able to demonstrate to the regulator that their internal culture and systems and controls fully support this goal.  The tools are out there and I encourage you to use them!



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