Newsletter - August 2008

Are You Treating Your Customers Fairly? - Impact of the FSA initiative on customer intelligence and reporting in Financial Services
By Ian Beaumont, Managing Director, Matrix-Data Solutions

There is a lot of talk in the financial services industry about the disintermediation between the end investor and the product provider or “brand” creating the financial product. Companies are increasingly pulling away from selling their products or managing the customer relationship and relying on advisory channels to do this on their behalf.

So when the FSA says that both the product provider and intermediary have to demonstrate that they are independently Treating their Customers Fairly, how should this be best achieved?

Some of the major obstacles faced by product providers and intermediaries alike are that:

• multiple companies own different parts of the service – one company may create the product, another may manage it, and another review it with the end customer;
• information to address fair treatment is held in many disparate systems, often by multiple outsourced service providers. As a result, there are often several systems holding different aspects of valuable client information;
• the effect of legacy data from industry mergers, acquisitions and third-party administrator changes make understanding and joining up the history of a customer’s relationship even harder;
• finally, these systems historically recorded and reported to the business based on processes and regulations, not built around a holistic view of the customer required for TCF.

Companies are pulling out all the stops to meet the deadlines set by the FSA. Many of them are stretching their own limited internal resources. In the long term a customer intelligence system can provide a framework that enables senior management to analyse all the information and act accordingly. If implemented correctly, the result is the objective of the TCF initiative; of helping change the fundamental culture of the organisation.

There is a need for senior managers in this industry to gain a better understanding of information across all the systems and supply chain. This creates a multi-dimensional view of their clients and enables companies to deliver TCF and valuable customer insight in an already disintermediated market that is only going to become more fragmented in the future.