Financial Institutions Have Bigger Worries than Friday the 13th

By: Lisa Sigler

March 13, 2015

Customer Engagement
customer experience
customer experience management

Feeling superstitious today? Organizations in today’s tightly-regulated financial industry have to worry about numbers quite a big bigger than 13 if they aren’t paying attention to their customer data.

The Wall Street Journal reports that in 2014, U.S. and European banks paid nearly $65 billion in penalties and fines. This record-breaking number is an increase of about 40% over 2013, which was the previous high. These fines are being levied for many different kinds of violations, of course, ranging from unfair lending practices to doing business with sanctioned governments – but simple lapses in customer service can also open banks up to penalties if they aren’t addressed in time. So, what can banks do to avoid the “bad luck” of being subject to fines?

  • Listen to customers. Establishing a Voice of the Customer program that monitors emails, Twitter, customer service calls, and other sources of customer intelligence will allow you to notice mentions of problems, complaints, or other red flags that you can get ahead of. For example, one major bank used customer feedback to discover that customers were concerned about online banking security. By increasing their security measures and publicizing the steps they’d taken, they reassured customers and decreased their risk of a security breach.
  • Have the right staff in place. “[B]anks are hiring thousands of new compliance specialists even as most of their operating departments shrink,” according to the Wall Street Journal. Creating a partnership between these new compliance specialists and customer insights professionals is critical. The compliance specialists can focus on internal processes and policies, while the customer insight team employs data analysis techniques to identify trends and root causes that point to violations.
  • Close the loop efficiently. Resolving issues quickly and fairly is more than just a customer loyalty issue – it’s a requirement. For example, the Consumer Financial Protection Bureau(CFPB) solicits consumer stories to help identify problems that they need to investigate. When U.S. banking customers submit complaints through the CFPB website, banks have “15 days to respond to [the consumer] and the CFPB. Companies are expected to close all but the most complicated complaints within 60 days.” Fifteen days isn’t a very long time to process customer feedback, identify issues, and close the loop with both customers and regulatory agencies, which is why having text analytics and speech analytics capabilities is so important. The CFPB has “helped return $4 billion to American consumers as a result of [their] enforcement actions.”

Clearly, there are other factors to avoiding penalties and fines besides  customer experience management: internal audits, security processes, careful hiring practices, and a corporate culture of honesty and fair-dealing are all crucial to the overall integrity of your business. However, listening to customers does give you a clear indication of problems, and helps you steer clear of violations and fines. Also, avoid black cats and walking under ladders – just in case.

Lisa Sigler is Sr. Manager of Content Marketing at Clarabridge. For over 16 years, Lisa has used her writing and editorial skills to bring the value and benefits of technology to life. In her current role, she works to demonstrate Clarabridge’s position as thought leader and trailblazer in the Customer Experience Management market. Lisa holds a B.A. of English from Kent State University. Read more from Lisa on Twitter @siglerLis.