The new Consumer Duty deadline is fast approaching, with the guiding principle to ensure that businesses deliver the right outcomes and support for customers, putting their needs first.
Our CEO Joseph George shared his thoughts with the FT Adviser on how businesses can smarten up their data governance.
Consumer Duty: smarten up your data governance or risk non-compliance
Since advisers and intermediaries across the board have been given an extension by the FCA to comply with its new Consumer Duty, it’s important to use this time wisely. Putting the customer first has always been at the heart of what they do, so the new Duty is a welcome measure that will help to do just that.
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Our data experts would love to hear from you
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The outbreak of the Coronavirus pandemic in 2020 saw an acceleration of digital transformation where most services had to go online. Since then, the data held by brokers has grown exponentially. Whether it is held in an email, handwritten notes, a personal drive or a firm-wide system, how this data is handled and managed is vital, not only from a data protection standpoint but also to help brokers best serve their clients and comply with regulations.
What is the difference between structured and unstructured data?
Having the right knowledge and insights drives meaningful relationships and can set you apart from your competitors. The quality of the service that any broker provides their customer ultimately depends on the quality of the data they hold. Without having control of their data in one secure, organised place, brokers and intermediaries can’t keep the customer at the heart of their operations. This means that good data governance is directly related to compliance with the new Consumer Duty, but there is one big obstacle in the way – unstructured data.
Data can be categorised as structured and unstructured. Whilst structured data can be read by a machine and therefore used to provide data-driven insights for effective decision-making, unstructured data is everything else. This includes data that is not detectable by technology, such as word documents, spreadsheets, PDFs, videos or even notes from face-to-face meetings with potential clients. It is predicted that by 2025, 80% of business data will be unstructured.
This is significant from both a data security and GDPR perspective and impacts a business’s ability to comply with Consumer Duty. The cyber risk is big, as it’s much easier for hackers to access sensitive information. In addition, whilst the data is scattered throughout a business, it means it cannot be organised, read and analysed to generate meaningful insights and the best experiences and outcomes for customers.
The question advisers need to be asking is whether or not they have a good strategy for handling the data they hold to make regulatory compliance easy for themselves. A Data Capability Assessment is a good way to measure this.
Vital data governance to comply and generate a single view
Ultimately, the data you get out will only be as good as the data you put in. If a repeat customer approaches a broker for advice, providing the best service means knowing what products they already have, what their situation is and what actions might be appropriate going forward. These steps cannot be taken if each adviser has their own notes stored in a multitude of ways. There will be multiple versions of the customer story and without a single source of accurate data, you cannot truly gain that single view.
Implementing a robust data strategy that organises and stores such data in a way that makes it transferable across an entire organisation for all advisers to access is the key. It’s an easy step to take to show the importance a business places on prioritising the customer, improving both compliance and transparency. The right operating model will consist of the right data governance, processes, people and technology to support the business in addressing these challenges on an ongoing basis.
Achieving good data governance allows you to harness the potential of your data, gain invaluable insights into where there are gaps in compliance and enables a single customer view. Making this a priority now will stand you in good stead come July next year when the new Consumer Duty regulation comes into force. Discover how mastering your data governance allows you to access strong data insights and means your advisers are much more likely to know what products customers don’t have, what products they might need and how they want to be communicated with.
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Contact the data experts
If you’d like some expert guidance on how to get ahead with managing your data, take a look at our accelerators or talk to a member of our team today
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