Two very important developments are changing pension providers’ views on how they tackle their back-office processing, says Anthony Rafferty, CEO, Origo.
One of the issues for our industry is legacy ways of working. As the world has moved from paper to digital applications and processes, the focus for providers, invariably and understandably, has been on front end processing, because that is the end that brings in revenue.
The consequence of this is that back-office processing, especially when it can lead to business leaving a company, is often left in the digital dark ages – i.e. reliant on manual processing, often including paper and postage.
Very positively, I’m seeing two very important developments which are changing the way providers now view their back-office processing.
The first, is the FCA’s Consumer Duty rules, which have focussed attention on service propositions in the context of delivering value, avoiding harm, and ensuring the best outcomes for the consumer.
Can providers say they have customers’ best interests at the forefront of what they do if their back-office is creating unnecessary delays when processing consumer requests?
How will the FCA view the case of an adviser being unable to act on behalf of their client because a provider takes weeks, or even months, to manually verify the client’s letter of authority, when it could be done in a matter of days?
Second, is a realisation which is coming through very strongly in my discussions with other industry CEOs, that the level of service they provide in all areas – front and back office – can directly affect them commercially.
In a digital age, the bar in terms of the speed and quality of service, is constantly rising. Relatively simple admin processes that take weeks or months to complete, simply won’t cut it in today’s market. They create a negative impression of the whole business. If this persistently happens, you start creating a business barrier.
No matter how good the provider’s front end is, if the adviser is receiving poor service from that provider in their back-office operations, that is going to colour their willingness to do business with them. Who wants to do business with a company that slows down your own service to your clients? If there is another provider who has an equally suitable product, and the adviser knows that they will receive an all-round better service from that company, with which are they most likely to put their business?
In addition, delays and poor service from providers feeds down into delays and perceived poor service to the end client. This can create a negative impression of the advice firm, often as the client’s first experience of the firm. Again, as an adviser to which provider are you going to give your business?
The regulatory argument aside, simply from a business perspective, delivering a fully customer centric level of service in all areas of the business, is where CEOs are now rightly focussing.
That means bringing in digital solutions to take on the heavy lifting. It’s cost effective for providers to do so. Our letter of authority digital solution – Unipass Letter of Authority – has helped reduce costs to businesses by up to 50% by making the verification and tracking of LoA’s an automated process. And that’s on top of the better service it facilitates. Simple but very effective!
Our industry sometimes lags others in its implementation of technology. The problem, now recognised, is in a world where it is very easy to compare service levels, and for customers to vote with their feet, poor service is not going to be tolerated.
To end with an analogy. I believe that providers in pole position on the customer service starting grid, are going to not just win the race, but will lap those at the tail end of the pack, picking up their customers on the way past.
