Solvency II aims to improve risk management, but will this benefit customers of financial services firms? If so, do they know this? At Vedanvi we have another bone to pick with the current level of disclosure in the financial services sector. We reckon that the sector has got to be more pro-active in winning back the trust of their customers and that means working harder at the PR and educating its customers about what the organization is doing to manage its and the risks of its customers.
Whilst disclosure is a key part of Solvency II, it’s not clear how this disclosure benefits customers directly. Vedanvi believes that financial services companies need to be better at educating and informing their customers about their ability to manage risk.
It’s almost as though the financial services sector is one of the few that just does not allow any adverse, or negative comment about its products, or actions.
Which is plain odd, given the fact that not only are the stakes high (people’s pensions, mortgages and savings), but the sector has been latterly hit by numerous claims of mis selling and poor advice.
The FCA and PRA is taking a close look at how sales staff are rewarded, but we reckon they might be missing an easy solution. Take a lesson from the ecommerce guys who live and die by customer feedback.
Buy an electronic item these days online and before you part with your cash, you can read the feedback and get an instant view on whether it’s value for money. It’s passed the advantage back to the customer and for those companies that work this model properly – Amazon is the best example – it has proved a goldmine.
So, we believe the financial sector has got to go down the same route. They need to be honest with their customers and encourage feedback from happy clients, and not be afraid of negative comments. Negativity, when channelled properly, works both for customer and provider alike. The shouty trouble makers are soon spotted for what they are and the fact that genuinely adverse comments can be posted, ensures that companies have to watch every part of the process. It’s a discipline that would revolutionise the whole sector.
It just needs one major company to embrace the concept and away we go, a new era of transparency and customer service. It is decades overdue.
We would love to hear your view – so why not leave a comment below or start a discussion!
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