By Luke Cheadle
Organisations within the banking and financial services sector are constantly juggling the
need to deliver exceptional levels of customer service with the levels of investment needed
to remain competitive. It’s a conundrum that often pits the Chief Financial Officer against
other members of the Board, as those on the front line of customer service seek to justify the
budget they need to drive greater efficiencies while raising levels of customer satisfaction.
Today there is a new battle to be fought, and a new area for CFOs to aware of. It concerns
how organisations manage and pay for the process of notifying a death.
Its genesis can be found more than three years ago, when the Financial Conduct Authority
(FCA) was calling out the death notification process as being a key area on which the banks
and other financial services providers should focus their attention. It has been given greater
prominence in recent days with the formal implementation of new Guidance from the FCA in
respect of Consumer Duty, and the need for financial services firms to be able to
demonstrate, if challenged, that they are acting to deliver ‘good customer outcomes’.
Most of the guidelines deal with the issue of ‘fairness’ and whether firms are delivering ‘fair’
value. There is also a large section given over to the fair treatment of customers, especially
in relation to vulnerability. Firms should be aware that some of the services/products they
provide could, in fact, create ‘a risk of harm’ to customers with characteristics of vulnerability,
and that as a consumer’s circumstances and needs change, firms need to ensure they are
acting with ‘the appropriate levels of care’.
In a ‘Dear CEO’ letter from Sheldon Mills, Executive Director, Consumers and Competition at
the FCA, to the leadership of the retail banks in May 2024, ahead of the July 31 deadline,
The Authority identified various weaknesses that some banks still had in how they identified
and dealt with vulnerable people. In particular, it highlighted how there was limited front-line
staff training on the needs of customers in vulnerable circumstances, leading to ‘potential
inconsistent treatment and a lack of prioritisation’. There was limited capability for inclusive
communications and limited testing of outcomes for customers on specific journeys.
Drivers of vulnerability
Within the umbrella of vulnerability are four key drivers: health; resilience; capability; and life
events. Within the latter, bereavement is one of at least seven such events that could result
in a customer becoming vulnerable.
An earlier FCA guidance note (Guidance for firms on the fair treatment of vulnerable
customers – 2021) that was published at the start of the programme evidenced best practice
in bereavement management, including one bank that had a dedicated in-branch
bereavement adviser who helped a consumer cancel all her partner’s Direct Debits after he
passed away.
It also identified worst practice, including a bank who told a consumer whose partner had recent died ‘to come back tomorrow’ because ‘there isn’t anyone here who does bereavement today’. As the guidance says, even if specialist staff were not available, all frontline staff should have been trained to advise the consumer on how registering a bereavement works, and been able to sensitively advise the consumer of their options. Lack of sensitive frontline support’, the guidance says, ‘can lead to disengagement and harm to the consumer’.
Buried deep within the guidance, it states that firms should ensure that they have systems
and processes that allow customer service staff to record and access information that will be
required in the future to respond to vulnerable consumers’ needs. ‘Consumers should not’, it
says, ‘have to repeat information’.
To that end, it highlights a specific example. It recommends having systems in place that
minimise the number of times a customer must inform firms about their vulnerability, and in
particular references a “tell us once” style process where customers can notify a
bereavement -just once. Which is all very well, but it takes investment, and it takes
convincing the CFO and the rest of the Board that the investment is worthwhile.
Death notification
Some organisations, it should be said, have realised the positive benefits that existing
services such as NotifyNOW and Settld have had on improving customer service, enhancing
their reputation, creating greater efficiencies, and addressing a specific Consumer Duty
concern. The challenge is that the FCA is only issuing ‘guidance’, and as such there is no
obligation for others to follow suit.
Perhaps the biggest challenge of all is one that is also called out in the recent Dear CEO
letter. The FCA says that within banks and financial institutions, it is often the case that there
is no clear ownership of outcomes for customers in vulnerable circumstances, and poor
management/awareness of the issues involved.
It is, of course, not as simple to say that money is the blocker to progress, and that the CFO
is the only barrier. First and foremost, they need to know, with total justification, that the
platform they are investing in works, and will not, in fact, end up costing them money for
trying to do the right thing. But the technology that is out there is already proven, with many
examples of how streamlining the bereavement reporting process is helping to remove huge
volumes of calls from contact centres and supporting firms in becoming more operationally
efficient. It is having the dual outcomes that two potentially competing forces seek: it saves
money and enhances customer satisfaction.
Perhaps by making someone directly accountable, and at a Board-level, we can convince
others that an efficient and effective death notification service is not only good for business,
but is also the right thing to do and make firms compliant with delivering ‘good customer
outcomes’.
