Financial institutions are increasingly focused on building deeper relationships with customers and standing out among their peers by offering satisfying and differentiated customer experiences. One of the challenges that these institutions face is the need to minimize the impact from negative experiences, and to do right by impacted customers.
According to a recent Consumer Financial Protection Bureau (CFPB) estimate, nearly 200 million people were eligible to receive consumer relief from public CFPB enforcement actions over the last 10 years, with many more receiving remediation from financial services providers outside of public enforcement actions. It is not a matter of whether institutions need to execute a customer remediation, but when.
In our report, Making Things Right When They Go Wrong, we reflect on our learnings and observations in building a strong foundation for customer remediations.
Four ways to restore customer trust
Defining customer impact clearly
Identify hard-to-detect downstream impacts and compounding effects of multiple issues. To mitigate the risks of leaving impacted customers behind, institutions should maintain clear and comprehensive methodologies that adopt a customer-centric view across the customer journey, consider a range of potential impacts, and enable detection of possible compounded impact across multiple issues.
Identifying impacted customers and remediation compensation COMPREHENSIVELY
Consider trade-offs between a precise but potentially laborious remediation, and a generous, less precise, and expeditious remediation. The optimal strategy for identifying impacted customers and determining remediation compensation depends on the characteristics of the expected impact, particularly regarding the frequency of the impact, as well as its severity and variance.
Delivering the remediation flawlessly
The delivery approach needs to address challenges and risks commonly observed during execution, such as inability to reach customers, customers not taking necessary actions, and breakdowns in internal and third-party processes. Banks can consider a portfolio of customer assistance and quality assurance approaches to mitigate delivery risks.
Optimizing the remediation program continuously
Financial institutions can develop a long-term plan to mature the required capabilities via process industrialization, talent specialization, strategic communication, and continuous improvement culture. As capabilities mature, the cost and risks of remediations can be better managed, and a deeper understanding of underlying causes can enable continuous improvements to business processes.