Podcast ¦ Arum: Better governance, better outcomes

Key Take Aways

1. The importance of having formal governance bodies to oversee outcomes for vulnerable customers in financial services is highlighted, as only 39% of surveyed firms currently have such structures in place.

2. Delivering fair and compliant outcomes not only maintains regulatory standards but also positively impacts customer lives and firm reputation.

3. Organizations must keep policies and processes up-to-date and easily accessible to support effective implementation.

4. Regular training and refresher courses for agents are crucial to ensure they remain informed about the latest regulations and best practices in customer engagement.

5. A strong Quality Assurance (QA) framework should assess fair treatment of customers and appropriate outcomes rather than merely evaluating adherence to internal scripts.

6. Tracking performance metrics should extend beyond basic statistics to capture insights on customer vulnerabilities, repayment sustainability, and resolution timelines.

7. Insights from performance metrics need to be integrated into governance at all organizational levels including team leaders, heads of operations, and board members.

8. Establishing cohort-specific governance panels aids in the review of complex cases and the refinement of treatment strategies.

9. A comprehensive risk and control self-assessment framework helps identify potential risks related to vulnerable customers and ensure appropriate controls are in place.

10. Testing existing control measures is necessary to ensure compliance and effectiveness, with corrective actions implemented when controls fail.

11. Small changes in oversight and processes can yield significant improvements in consumer protection and compliance.

12. Organizations should aim for a holistic framework that reinforces regulatory compliance while delivering fair outcomes for consumers, particularly those in vulnerable circumstances.

Key Statistics

• Only 39% of firms have formal governance bodies to oversee outcomes for vulnerable customers.

Key Discussion Points

1. The FCA’s review emphasizes the need for improvement in monitoring outcomes for vulnerable consumers.

2. Improved governance structures are essential to prevent poor customer outcomes that can damage reputation and lead to regulatory penalties.

3. The necessity of having updated collections, vulnerability policies, and clear forbearance policies is essential for effective implementation.

4. Training should be ongoing and adaptive, focusing on real-life case studies to enhance agent knowledge and performance.

5. QA frameworks should go beyond basic metrics to consider overall customer treatment and outcome appropriateness.

6. Insights derived from performance metrics can reveal trends that help tailor strategies for vulnerable customer cohorts.

7. Governance insights should be utilized at every organizational level, ensuring accountability and responsiveness.

8. The value of dedicated governance panels for reviewing complex cases involving vulnerable customers can strengthen support strategies.

9. Mapping and assessing risks related to vulnerable customer treatment should be a priority for all firms.

10. Periodic testing of control frameworks ensures that processes remain robust and effective in real-world applications.

11. Collaborative efforts to enhance governance can lead to meaningful changes that protect consumers while minimizing regulatory risks.

12. Training programs should focus on upskilling agents to ensure consistency and professionalism in customer interactions.

Podcast Description

In this episode of RM AI Insights, host Ella is joined by James, Senior Business Development Manager at Aram, as they delve into the critical importance of governance and oversight in collections and recoveries, particularly for vulnerable consumers. They discuss key findings from the FCA’s recent review on consumer vulnerability, emphasizing how organizations can enhance their frameworks to deliver better outcomes. The conversation covers essential areas including updated policies, training, quality assurance, metrics, and risk management, providing practical insights for financial services leaders aiming to implement effective consumer protection strategies.