Examples - Outcome 5
Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect.
Example 1
A large mortgage intermediary tracks the outcomes for customers who are offered payment protection insurance
An intermediary that sells payment protection insurance uses several indicators to assess whether it is achieving TCF Outcome 5:
- A target percentage for claims being rejected;
- An exception report that tracks any breaches in operational requirements such as the issue of renewal notices with payment information missing;
- Persistency rates with target percentage to be achieved;
- Satisfaction measures with a target for the number of customers that are dissatisfied;
- An assessment of customer feedback received with a target for the percentage of positive reactions; and
- Number of complaints as a percentage of the total number of customers with a certain percentage triggering a red, amber or green rating.
For each indicator, a commentary on the performance and root cause of any issue is set out along with the action taken to improve the position.
Comment:
In addition to the monitoring described, the firm may want to consider allocating accountability for this TCF Outcome to a particular executive. It may also want to assess the impact of changes made to ensure that they achieve their objectives for improved customer outcomes. Considering the potential commercial benefits of this approach, the firm may seek to utilise some of the performance measures in its communication activity to both prospective and existing customers. In this way it may wish to highlight that it is treating its customers fairly as a way of building its customer proposition.
Example 2
An insurer tracks claims and investment performance to assess if it is meeting the expectations of its customers
An insurer uses a TCF dashboard based on a red, amber and green (RAG) system. The dashboard uses several key indicators that have been identified as evidence of fair treatment. Each indicator has a measurable target and an individual who is accountable for achieving that target. The indicators are mapped against the product lifecycle to ensure that there is coverage at each stage. To support evidence for Outcome 5, the firm tracks two indicators that link both to the expectations that the firm has set and its performance against those expectations:
- For investment related products, it reports upon its fund performance against a benchmark over different time periods; and
- For insurance protection products, it measures the decline rate on claims.
The dashboard maps the RAG rating on a monthly basis and shows the historical position over the previous 12 months. A commentary is provided to explain performance.
Comment:
With assessment mechanisms in place it will be important for senior management to understand the output from these assessments, the different factors which may be driving the results and to take action as required. Such action might be to consider amending customer communications, staff training, investment approach or claims strategy so that it can improve alignment between what it promises customers and what is delivered. There is an important link between Outcome 5 and Outcomes 2, 3 and 4. Setting clear standards and meeting them may enable the firm to build a stronger reputation with customers and in the wider marketplace. This could benefit the firm through more cost effective customer acquisition and improved customer retention.
Other examples
- Outcome 1 - Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture
- Outcome 2 - Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly
- Outcome 3 - Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale
- Outcome 4 - Here customers receive advice, the advice is suitable and takes account of their circumstances
- Outcome 6 - Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint