Interaction analytics to remediate compliance issues

As 2019 comes to a close, it’s time to reflect on the huge changes that have taken place across banking, insurance and wealth sectors this year, and what the financial services industry can do to set itself up for a better 2020.

The aftermath of the Hayne Royal Commission has seen many financial institutions coming head to head with reinvigorated regulators who are looking to identify and condemn misconduct. Time and again we are witnessing cases of misconduct come to the surface. And those being penalised are receiving so much more than just a slap on the wrist.

Regulatory repression shows no signs of slowing

The most recent development in condemning bad behaviour relates to The Australian Securities and Investments Commission (ASIC), which is cracking down on organisations covering up inappropriate information in financial jargon that’s complex and challenging to actually understand.

As mentioned by ASIC deputy chair Karen Chester: "The over-reliance on disclosure in some ways proved an enabler of poor conduct and poor consumer outcomes revealed by the financial services royal commission."

This is just one of the many recent incidents that demonstrates a lack of transparency between the financial sector and consumers. But while the headlines are flooded with stories relating to regulatory misconduct across sectors, these issues aren’t actually new. In fact, many of these historic cases date back years. So, how exactly can the industry start fixing the myriad of compliance issues repeatedly coming to the surface?

Clearing out skeletons in the closet

The Hayne Royal Commission has acted as a significant warning to the entire financial sector. It is critical for financial institutions to investigate what issues they may be facing internally, so they can take appropriate remediation before the regulators crack down.

It takes a substantial amount of time and resources to wade through skeletons; there’s no denying that this process is far from easy. The industry is required to trawl through hundreds of thousands, if not millions, of call recordings to identify any potential compliance issues. Not to mention all of the online messages and emails, making the entire process feel like an impossible task. Added to which, there are many perceptions that this crackdown on operations will make the ‘perfect’ customer experience much harder to achieve.

In some instances, the costs involved in remedying these issues can even equal the fine or remediation payments the financial institution will need to make. So, financial institutions either risk the cost of a fine or invest in an expensive internal investigation, which may lead to nothing.

Interaction analytics will save the day

But ultimately, financial institutions should not be gambling with compliance. And, the good news is, there are plenty of tools available to help steer them through these choppy regulatory waters.

Artificial Intelligence (AI), automation and intelligent analytics can streamline compliance activity by trawling through customer communications across all channels, identifying and flagging issues. This helps businesses quickly identify non-compliant calls or interactions.

This technology can even conduct real-time analysis to prevent issues from ever taking place. Whilst operatives are communicating with customers, it can flag potential compliance risks as they arise, such as failing to take customers through product disclosure statements or failing to recognise if the customer has understood them correctly.

This ensures that all interactions with customers - whether online or offline - meet the regulatory standards in real-time. Even if the conversation enters a grey area, smart AI can flag any contentious topics and words related to these potential issues for compliance or risk officers for further review.

Get ahead of the curve today

The regulatory environment is continuing to evolve rapidly. With this technology, there’s a major opportunity for the financial sector to get ahead of the curve, implementing changes that ultimately could save the business.

This proactive approach to compliance shouldn't be an afterthought or a solution you put in place once an issue has been raised. It should be the foundations of businesses compliance efforts to ensure the customer experience is the best it can be, helping change perceptions of the financial industry.

Ultimately, customers are paying good money for a service and that service should be exactly what they expect. If it’s not, brands not only risk large fines from the regulators and even prison time, but also reputational damage that can quickly destroy customer trust.

Michael Stelzer is Verint vice president, Australia and New Zealand.