Ron Lay, Director, Investia

Below is an insight into what can be expected from Ron’s participation at CeFPro’s Customer Experience Summit.

The views and opinions expressed in this article are those of the thought leader as an individual, and are not attributed to CeFPro or any particular organization.

Where are institutions most likely to encounter regulatory pressure and potential fines when dealing with customer experience and operational resilience?

There are many aspects and responses to this question, but in my experience, there are three key areas that attract the most regulatory attention:

• Data Privacy and Security: Regulatory bodies closely monitor how institutions handle customer data, ensuring that privacy is protected and data breaches are prevented or mitigated. The Dark Side is that non-compliance can and will lead to reputational damage, increased oversight, and possibly substantial fines. It is hard to overstate the severity of the attention that a customer data breach attracts from regulatory authorities around the world!
• System Resiliency, Availability, and Cybersecurity: Regulatory bodies worldwide expect robust systems and procedures that safeguard customer data and critical operations, particularly as they relate to data privacy and payment processing. When systems fail, the results are very damaging to the organization financially and reputationally. And given the ever-increasing sophistication of cyberattacks, institutions must demonstrate a proactive approach to cybersecurity, with robust monitoring and proactive defensive approaches.  What worked yesterday probably won’t work tomorrow.
• Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance: Institutions are required to have robust AML and KYC practices to prevent money laundering and fraud. While this can often feel like boring “book-keeping” or “bureaucracy”, failure can result in significant fines and legal consequences — this is particularly important in the ever-changing modern world, as governments employ cross-border sanctions and economic policies that have to be reflected in the digital systems deployed by financial services organizations. My motto in this regard has always been: “Don’t complain.  Get good at it.”

In the end, we need to be proactive in this space: prioritize compliance, develop, deploy, and maintain robust and resilient systems, and maintain open communication with the regulators.

How can frameworks assist with ensuring business continuity? Can you give any examples relevant to your institution?

Frameworks — which, in my view, include the triad of “product”, “process”, and “people”, can provide structured approaches that guide organizations in establishing and maintaining robust business continuity practices. While there are many aspects to this question, for me, the “Big Four” are:

• Leadership Buy-In: It may seem odd to start with this one.  But in my experience, projects like this will succeed when there’s consistent, explicit, public, and unambiguous buy-in from top management.  Without it, they are doomed to failure.
• Resource Allocation: Business continuity frameworks assist in identifying the resources needed to maintain critical functions during disruptions. This includes personnel, technology, facilities, and communication systems. Allocating these resources strategically helps ensure swift response and recovery.
• Continuous Improvement: A good framework will — naturally and without additional effort — promote both a process and a culture of continuous improvement. The framework should naturally encourage, indeed, demand, the teams to review and update their business continuity plans regularly based on changing risk profiles, emerging threats, and lessons learned from real incidents.
• Testing (Testing, Testing): A good framework will provide and demand regular testing and training exercises. The approach should be to simulate disruptions based on both theoretical and real-world experiences and provide the teams with the ability to evaluate the effectiveness of their plans, identify weaknesses, suggest improvements, and train employees to respond effectively, all the while demonstrating that the tools, procedures, and personnel are getting better.  My motto has always been: “Don’t let a good outage go to waste.”

In the end, frameworks are invaluable tools for financial institutions to establish a solid foundation for business continuity and operational resilience.

What are the advantages of maintaining a customer-centric lens? What strategies should institutions follow to allow for this?

Starting with the customer is the most basic tenet of all and doesn’t need further exposition.  The most successful organizations in the world — both in and out of financial services — have always made this a cornerstone of their approach.  However, in the end, it’s one thing to say it and another thing actually to do it.

So … how do you do it? Here’s my “Top Five”:

• Reliability: This seems obvious and boring, but in the end, it is “Job One”. If the system isn’t available, you can’t service the customer.  This simple mantra has wide-ranging effects, as it affects how products are designed, built, deployed, maintained, and grown.  The importance of testing (testing, testing) cannot be overstated here — and happily, the rise of automated testing suites and approaches can play a huge role in this. It will play an ever-increasing role going forward
• Omni-Channel: Everything. Everywhere. All at once. In today’s world, customers expect seamless and consistent experiences across various channels, including online, mobile, in-person, and call centers.  My own passing comment is that I think in our drive for automation, we have not invested enough in meaningful human interactions with customers — either through call centers or branch interactions.  While “expensive” (looking at a spreadsheet), my view is that they can and should be an important mechanism for establishing and growing customer loyalty and feedback.
• Frontline Staff: This is related to the item above. Organizations must equip frontline employees with the tools, training, and autonomy to address customer needs effectively. Empowered and loyal staff can change the world.
• Personalization: Tailoring products, services, and communication to individuals are demonstrably effective in building customer satisfaction and brand loyalty.
• Leadership Buy-In: As previously referenced in another question, support of senior leadership — active, vocal, unambiguous — is the secret sauce to success. For me, it’s hard to overstate the importance.

How can institutions address the materiality of service providers?

Service providers are, of course, a critical component of the customer experience landscape and vital to the overall operational resilience of the organization — and managing their materiality is absolutely imperative for maintaining trust and stability.

There are a number of ways for firms to address this issue, from ensuring that contracts with service providers are clear and explicit, ensuring that contingency planning is robust and monitored regularly, that regular and thorough real-world resting and drills are performed and analyzed, that proper risk assessment and due diligence are performed routinely, and that redundancy is factored into the overall system.