Responding professionally to the payment protection insurance debacle is about much more than paying money back to those affected by the ruling. It is also about a provider’s reputation and rebuilding consumer trust in financial services.
You cannot put a price on reputation, so the saying goes, or maybe you can. In the past couple of weeks, high street banks have put aside billions of pounds to pay redress to consumers who were mis-sold PPI.
While the decision to do the right thing by consumers has been made from a financial point of view, it is also an exercise that could rejuvenate trust in the beleaguered financial sector if handled correctly, or entrench consumer blame for the credit crunch if handled badly.
It’s not just the reputations of the high street banks that are on the line. While they were prepared to publicly state the cost of dealing with the problem and show consumers they understand the seriousness of the issue, smaller players that don’t have the stock market or British taxpayers to answer to have been more reticent to quantify what it means for them.
That is not surprising when you consider that small and medium-sized institutions aren’t in a position to absorb the impact of the exercise in the same way that high street banks can. In many cases, the ability to spread work over a number of different departments is a luxury that is not available – they may have to look further afield for the support they need.
“Let’s hope that we don’t fall foul of the saying – if you fail to prepare, prepare to fail”
Nevertheless, it is an opportunity. Getting it right means delivering the kind of service that customers remember positively and in no way prejudices their choice of provider in the future.
Taking months, or even years, to process claims will not be acceptable and you can rest assured that the Financial Services Authority will be watching PPI providers to ensure that cases are handled within an appropriate time frame.
Getting it wrong means billions of pounds would be used purely to firefight, with providers missing out on the potential added value of enhanced reputation that could be gained by a positive customer experience.
Securing a suitably skilled overspill resource now would certainly provide some of the bigger players with security against this unwelcome outcome.
It would also protect against the potential impact of social media, which makes complaining about lenders easier than ever before.
And the newspapers, keen as ever to harness public opinion, will be happy to report on consumer nightmares.
If providers are reading stories a year from now detailing how consumers have not been paid money or how providers have created a bureaucratic nightmare for those with PPI claims, the process will have failed.
For the smaller institutions, failure is likely to look far worse than a bloodied nose. So with everything from reputation to survival on the line, what does a correctly managed PPI process look like?
First-time resolution is the holy grail in the complaints industry because the complaint is resolved and the consumer is unlikely to bad-mouth their service experience.
Once a complainant has to make further calls, irritation sets in and can be vented in the pub, in the workplace, through social media and the traditional press.
To achieve first-time resolution, providers will need employees with a specific skill set that combines customer service and financial industry knowledge.
Despite high unemployment, these skills will not be easy to find and are likely to get harder as organisations gear up for the contact and redress exercise.
It will cause administrative headaches to manage a call centre that is receiving 100 complaints one week and only 10 the next, and to make sure that temporary staff have adequate training to handle complaints.
And new recruits are unlikely to deliver an appropriate level of service or offer a cost-effective solution within an appropriate timescale.
Reassigning existing employees could also cause problems. An organisation that was built on the back of a sales culture is going to have difficulty transferring that skill-set into one that can empathetically handle complaints.
Overall, it is difficult to envisage how some providers can deliver PPI investigations and redress in a timely fashion without the use of a third party that is experienced in complaints management.
It is a challenge the industry has to rise to, and quickly, as it’s an opportunity to regain the trust of consumers.
Let’s hope that collectively we put in the preparation so that we don’t fall foul of another saying – if you fail to prepare you should prepare to fail.