Are Your Customer Treatments Consistently Fair, or Just Fairly Consistent?

Every lender – like virtually every company – wants to provide consistent treatment to customers, as part of fair treatment. Regulators insist on it — witness the UK’s Financial Conduct Authority, which states, “Treating customers fairly (TCF) remains central to our expectations of firms’ conduct, that firms put the well-being of customers at the heart of how they run their businesses.”

Treating customers fairly and ensuring decisions are connected across business areas is a high priority for the leading organizations in banking. This can also reduce the volume of customer complaints and have a positive impact on attrition rates.

Our FICO TRIAD consultants have the following five tips for portfolio managers, risk managers and (yes, there are such things now) chief customer officers:

1. Include as standard a consistency check with all other decision areas whenever a strategic change is made.
2. Carry out an annual review of consistency.
3. Encourage collaboration between departments to ensure there is a standardised risk view for segmentation, scores and treatment applied.
4. Identify the person(s) responsible for making strategic decisions on accounts in arrears that are not in the collections queue. If this does not fall within the Collections team’s remit, agree on a common treatment plan between Collections and the relevant business area.
5. Review treatment and risk definitions across multiple products in order to offer customers a completely consistent experience at an organisational rather than a product level.

For such a seemingly simple concept, consistency has multiple dimensions – across channels, across products, across the customer lifecycle, across customer cohorts. Make sure you are covering the bases.