Risk and Reward in Customer Communications

As all bankers know, every interaction with a customer is both an opportunity and a risk. It is an opportunity to delight the customer by providing convenient, comfortable, consistent and customized service and an opportunity to potentially up-sell or cross-sell them additional products. However, each interaction also represents a risk that the customer service will not meet the customer’s expectations.

When bankers think of customer interactions they most often think of transactional interactions such as a visit to the branch or website, use of an ATM or a call to the call center. What they tend not to focus on are the many interactions that occur as a result of the communications between the institution and its customers including statements, emails, bills, notices, contracts, offers and the like. This is especially true from a risk perspective.

Increasingly, financial services firms are coming to realize that their customer communications infrastructure presents regulatory, reputational, privacy, security, brand and customer engagement risks. This is perhaps best illustrated through several case studies.

The first case is a global multi-line insurance company with over 100 thousand employees doing business in 130 countries. The claims adjudication process in this firm generates over 4000 letters and forms per day and this volume is expected to double in coming years. Over half of these communications are generated using desktop software with little or no control of templates or content. The firm’s management became concerned that there was no way to ensure that the proper regulatory notices and disclaimers were included, that the appropriate archival, privacy and security procedures were being observed and that reputational, branding and customer service levels were being maintained.

The second case is a global retail bank with over 175 thousand employees and over 65 million customers in North America, Europe and the Pacific Basin. The bank’s consumer lending group produces thousands of letters, loan packages, bills and notices per week through varieties of manual processes which have resulted in a 25% error rate and the need for extensive manual review and re-work. As a result, the bank’s risk mitigation office has no way to ensure that these documents comply with local regulation, adhere to corporate branding, privacy and security standards or conform to bank customer service policies.

The third case is a major European bank serving over 6 million customers through 3500 branches. The branch operations of the bank generate millions of letters and emails each year all through un-controlled desktop systems. As a result, the bank’s auditors and management have no way to ensure compliance with regulatory requirements, security and privacy policies, and mandated archival, search and retrieval capabilities.

In each of these cases , the institution has exposed itself to significant risks as well as the potential to provide inconsistent customer service because they failed to identify customer communications as a business-critical process and, accordingly, to devote the same level of investment, control and oversight that they would have applied to transactional systems.

So how does a financial firm mitigate the risks inherent in customer and counterparty communications while at the same time maximizing the trans-promotional and cross/up-sell opportunities this channel provides? The answer lies in first recognizing the potential risks in the firm’s current systems and then minimizing or eliminating these risks by the implementation of an enterprise-wide communications infrastructure .

The heart of an enterprise communication solution is:

1. A repository to permit the secure, auditable creation maintenance and versioning of document templates, text fragments (disclosures, disclaimers, etc.) and the rules which drive which text fragments must be included in which document templates . This permits the firm to create and manage document templates which contain approved branding, privacy and security elements and which are pre-populated with the appropriate text fragments to ensure regulatory, reputational and internal policy compliance. 

2. An engaging, intuitive user interface which allows users to peruse the template library, select the appropriate template, pre-populate it with required text fragments and customer information and then enter free-form text, create and add attachments, add trans-promotional content and select the delivery media.

3. A flexible and comprehensive review and approval workflow. This function is also driven by rules established by the system administrators. 

Following any required approvals the system must then:

4. Document assembly and application of privacy or security policies established for that template including document encryption, content certification, and secured access which requires the recipient to use pre-established user credentials to open and view the document.

5. Automated document delivery, either physical delivery via structured, programmatic or a d-hoc print, and/or electronic delivery via facsimile, email or web based on either user direction or counterparty preferences.

6. An automated archival, search and retrieval system to ensure compliance with regulations such as SEC14a

Through this kind of approach, the firm can ensure that users in the branches, the main office or elsewhere are using a single, integrated system to create customer and counterparty communications. This ensures that all customer communications are based on secure, controlled and auditable templates, are automatically populated with both required disclosure, disclaimer and other mandated language, conform to brand, privacy and security policies, and provide the requisite levels of customer convenience, comfort, consistency and customization to drive increased customer engagement.

In each of the cases outlined above, the firm took the necessary steps to commit to and implement an enterprise level customer communication platform and each has recognized substantial cost savings, customer service and efficiency benefits but, most importantly, has dramatically reduced the compliance and other risks associated with uncontrolled communications.

Perhaps the best example is the first case, that of the global multi-line insurance company. In this case the company implemented a new communications platform over a nine month period which incorporates secure templates, policy controlled text fragments, and intelligent document assembly tool, multi-channel delivery and fully SEC14a compliant archival search and retrieval.

Even in the first few months of production operation, this new platform provided clear quantitative benefits including the ability to leverage the ubiquitous Adobe Reader client for “round-trip” outside the firewall, a 100% user adoption rate and very high user satisfaction scores, increased compliance by eliminating un-controlled letter processes, reduced time for business analysts to modify templates from six weeks to six minutes and a reduced number of “clicks” required to request letter packages from 35 to 20.

Your customers are your greatest asse ts and the way in which you communicate with them can make or break the relationship , as well as expos e the firm to unnecessary compliance , reputational and other risks. An enterprise customer communications solution can help ensure the highest level of customer service, the most cost effective communications and that your communications adhere to regulatory and policy standards, ensure the security and privacy of customer data and reinforce your brand. 

Chip Greenlee , Director, Financial Services Industry Adobe Systems, Inc., is responsible for identifying and defining market opportunities for Adobe in the financial services sector and developing go-to-market programs that enable Adobe to monetize those opportunities.