Banks and other financial institutions face regulatory compliance standards that have been developed to improve both the security of client accounts as well as to ensure the clarity and transparency of financial transactions. Current federal laws can require things like an explanation of interest rates as well as contract liabilities for investment transactions, mortgages and other types of loans. If your organization collects customer information online, you are also required to reveal what you do with that data. Much of this is known as the “fine print” on your application forms, statements, electronic correspondence and even marketing materials. And the specific content may be different from one legal jurisdiction to another, or can change with new governmental rulings. While compliance sets the bar for the minimum required within a customer communication, many organizations take that as a maximum. However, forward-thinking financial institutions will raise the bar.
While compliance language is designed to protect financial services organizations and their clients, it’s often presented on a customer communication as convoluted “legalese” that can confuse recipients or even arouse suspicions about what you might be up to. Worse, as the number of regulatory requirements increases, compliance takes up more space in customer communications without helping to improve the customer experience or build the relationship that customers expect from their financial organization, which houses detailed private information about them. This can run counter to your client’s expectations of attentive, personal service. We must keep in mind that client communications serve this higher purpose.
Building a Communications Vehicle
Take a step back and look at your customer communications strategy. Instead of designing your forms and documents first to accommodate the compliance material, look at that language as a secondary—though necessary—element of your communication pieces. Think of your communication vehicles as a structure, with the mandatory language as a foundation that you can build upon with specific, personalized information about a client’s account, answers to their questions and requested product information.
Software is available today that allows you to develop a centralized communications portfolio that via rules-based assembly structure, includes the various compliance pieces you need (i.e. selected CFPB and FRB Regulations), but also provides the flexibility to personalize your outreach to clients and improve the customer experience.
For example, a customer service representative (CSR) in your call center might get a call from a client for information about an auto loan. The CSR may respond to the client by utilizing an automated system that supplies the necessary regulatory language relevant to that specific client’s account, but also has the ability to customize the response by creating an electronic or printed document that mentions the model of the client’s car or by referencing something that was said in the personal interaction: “Congratulations! Your team made the playoffs.”
Similarly, monthly statements can be constructed that include all necessary compliance language—even last minute changes. For instance, if a new regulation is implemented in Michigan or Utah, the financial organization need enter the new language only once in a centralized database and all the outgoing communications to clients in those states will be updated automatically. As with transactional correspondence, statements can be designed to allow for personalized messages that reflect clients’ tastes and interests.
Critical documents like applications for credit cards, mortgages or brokerage accounts are important entry points into a customer communications management system. Ideally, this data should be entered only once, archived in a central location and then be accessible for all later communications. This avoids wasting the time it takes for every department to rekey data and eliminates potential errors. And in any financial services organization, every chance to save money without compromising the client relationship counts.
With the proliferation of communications devices, the media channel you use to deliver your message can be as important to your clients as the message itself. Many will request traditional printed-and-mailed documents, while others prefer mobile options delivered via email, text, Facebook or Twitter. Again, the preferences ideally will be noted in your customer communications management system or CRM system and deployed automatically for individual clients.
Inside or Outside the House
A customer communications management system that automatically includes accurate, relevant compliance language reduces the risk that your organization isn’t complying with required regulations and relieves your staff of the burden of remembering to collect all that must be included in a letter or note they send to a particular client. It can also speed response times to further improve service. Most importantly, it will reduce risk of exposure to costly legal liabilities through an electronic audit trail of all outbound communications.
Financial organizations that employ outside vendors, such as printer service providers (PSPs), rather than investing in an in-house document production facility, can still maintain control over the content, creation and archiving of their customer communications while the PSP handles production and delivery via print or mobile channels.
Finally, it should be said that few of your clients likely will care about the compliance information as much as the other content you send—their statements, correspondence, promotional materials, etc. While we all must comply with the laws, the real job of customer communication is providing service to satisfy clients’ needs, and elevating the art of “Know Your Customer” to directly impact customer lifetime value (LTV) for mutually beneficial relationships.
Michael Charest is the vice president of healthcare, financial services and insurance for GMC Software Technology.