Designing the Customer Experience: A Lesson in Data Analytics

Lenders might feel restricted by the recent rise in regulatory requirements, but instead, they should use the guidance to create a better customer experience.

That was the message from Kevin Moss, chief risk officer for Wells Fargo & Co.’s consumer lending group, to debt collectors and risk managers at a recent industry conference. Moss pointed out that Consumer Financial Protection Bureau legislation is meant to help customers make more informed decisions, so lenders should refine data-analysis methodology with that goal in mind.

Specifically, management teams need to monitor data and keep their eye on all customer communications. Further, executives must ensure that approaches and controls used to assess the customer experience are utilized to manage risk. “If one customer complains, there are likely more,” Moss said. “Ultimately, it’s important to understand what your customers are telling you.”

During the presentation, Moss told attendees that strong risk management drives favorable experiences, and that achieving regulatory compliance is only a first step in satisfying customer needs. In a nutshell: Every customer interaction is an opportunity to own the moment, he said. To that end, customer-level data is essential.

Traditionally, compliance entails conforming to the details of a regulation. Nowadays, institutions are better served by leveraging data analytics ― from different channels and transactions ― to optimize processes and enhance customer experiences. “The idea is that by using customer-relationship data, you can enhance the offers you make,” Moss told the audience. “Ultimately, for any lender or financial group, the goal is to simplify products and reduce process complexity.”

As such, lenders must establish easily understood and measurable benchmarks for service standards. Then, they should monitor their performance through testing, data analytics, and other similar strategies.

Perhaps the most important risk, though, relates to dealing with vendors, Moss warned. Lenders must develop extensive policies to ensure that third parties treat customers just as the bank or lender would treat them. in some cases, that policing requires hiring professional and experienced teams to manage third-party relationships and to make efforts to ensure clear accountability.

Lenders should also review current relationships to ensure they are working with those who have scale and infrastructure to drive excellence in execution and to support broad compliance and operational risk programs.

The bottom line, according to Moss: Be clear about accountability, and be clear about who is managing whom.

―Cody Lyon

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